COLUMBIA  LIBRARIES  OFFSITE 


ADDRESSES 

DELIVERED  AT 

THE  CHAMBER  OF  COMMERCE  BEFORE  THE  COMMISSION  TO 
INVESTIGATE  THE  NEW  YORK  CUSTOM  HOUSE. 


Published  bt  the  New  York  Chamber  of  Commerce. 


i£x  ICtbrtH 


SEYMOUR  DURST 


When  you  leave,  please  leave  this  hook 

Because  it  has  heen  said 
"£ver'thing  comes  t'  him  who  waits 

Except  a  loaned  hook." 


Avery  Architectural  and  Fine  Arts  Library 
Gift  of  Seymour  B.  Durst  Old  York  Library 


ADDRESSES 


OF  THE 


SPECIAL  COMMITTEE 


OF  THE  CHAMBER  OF  COMMERCE  OF  THE  STATE  OF  NEW  YORK, 


ON 


Customs  Revenue  Reform, 


DELIVERED  JUNE  4,  1877, 

AT  THE  ROOMS  OP  THE 

CHAMBER  OF  COMMERCE  OF  THE  STATE  OF  NEW  YORK. 


BEFORE  THE  COMMISSION  APPOINTED  TO  INVESTIGATE 
THE  NEW  YORK  CUSTOM  HOUSE. 


NEW  YORK: 
PRESS  OF  THE  CHAMBER  OF  COMMERCE. 

1877. 


-  f{U> 


Digitized  by  the  Internet  Archive 
in  2014 


http://archive.org/details/addressesofspeciOOnewy 


INDEX  TO  ADDRESSES. 


PAGE 

Eaton,  Sherburne  Blake,  5 

Bobbins,  Daniel  C,   31 

Barbour,  Thomas,  39 

Schultz,  Jackson  S.,   48 


MEMORANDUM. 


The  Commission  appointed  by  the  Secretary  of  the  Treasury  to 
investigate  the  Custom  House  at  the  port  of  New  York,  consist- 
ing of  Honorable  John  Jay,  Mr.  Lawrence  Turnure,  and  Mr.  Joseph 
H.  Robinson,  met  on  the  fourth  day  of  June,  eighteen  hundred 
and  seventy-seven,  at  the  rooms  of  the  Chamber  of  Commerce  of 
the  State  of  New  York,  in  the  city  of  New  York,  for  the  purpose 
of  being  addressed  by  the  Special  Committee  on  Customs  Revenue 
Reform  of  the  Chamber  of  Commerce.  This  committee,  consist- 
ing of  Mr.  Jackson  S.  Schultz,  Mr.  Thomas  Barbour,  and  Mr. 
Daniel  C.  Robbins,  together  with  their  counsel,  Mr.  Sherburne 
Blake  Eaton,  appeared  before  the  Commission,  and  delivered  the 
following  addresses. 


ADDRESSES. 


ADDRESS  OF  MR.  SHERBURNE  BLAKE  EATON. 

Me.  Chairman  and  Gentlemen  of  the  Commission  : 

I  appear  before  you  in  behalf  of  the  Committee  on  Customs 
Revenue  Reform  of  the  Chamber  of  Commerce  of  the  State  of 
New  York.  You  have  most  generously  consented  to  give  one 
day  to  the  members  of  that  Committee,  to  enable  them  to  for- 
mally present  their  views  with  reference  to  certain  proposed  changes 
and  reforms  in  existing  Customs  laws  and  Treasury  regulations, 
and  in  the  methods  of  administering  them.  Your  courtesy  in 
granting  this  hearing,  after  you  have  already  given  the  general 
subject  prolonged  and  thorough  investigation,  is  sincerely  appre- 
ciated. 

At  the  outset  of  my  remarks,  I  desire  to  express  to  you  the 
thanks  of  the  Committee,  and  of  the  importers  of  New  York  whom 
the  Committee  represent,  for  the  services  you  have  rendered  to 
them,  and  to  the  importing  interests  of  the  country,  in  your  pres- 
ent investigation.  My  recent  professional  duties  have  brought 
me  into  direct  intercourse  with  a  very  large  number  of  our  local 
importers,  and  I  but  give  language  to  their  sentiments,  when  I  say 
that  they  all  feel  towards  you  a  sense  of  personal  gratitude  for  the 
laborious,  thorough,  and  impartial  manner  m  which  you  are  con- 
ducting your  work. 

The  Committee  on  Revenue  Reform  of  the  Chamber  of  Com- 
merce consists  of  three  members — Mr.  Jackson  S.  Schultz,  Mr. 
Thomas  Barbour,  and  Mr.  Daniel  C.  Robbins.  This  Committee 
was  appointed  at  a  general  meeting  of  the  Chamber  of  Commerce 
held  on  the  5th  day  of  October,  1876.  The  resolutions  under 
which  the  Committee  was  appointed  provide  that  the  members  of 


6 


the  Committee  shall  bring  to  the  attention  of  Congress,  at  its 
next  session,  the  importance  of  such  modifications  of  the  laws  and 
regulations  under  which  our  revenue  laws  are  enforced,  as  will 
make  them  intelligible  to  both  merchants  and  government  officials. 
The  resolutions  further  provide  that  to  more  effectively  promote 
the  latter  object,  the  Committee  shall  be  empowered  to  co-operate 
with  such  committees  as  may  be  appointed  by  like  bodies  in  the 
cities  of  Boston,  Philadelphia,  and  Baltimore. 

A  similar  committee  was  appointed  by  the  Chamber  of  Com- 
merce nearly  four  years  ago,  when  our  local  importing  interests 
were  burdened  with  the  evils  of  the  moiety  system,  and  of  the  law 
authorizing  the  seizure  of  books  and  papers.  Two  members  of  the 
present  Committee  were  connected  with  that  committee,  and  I 
had  the  good  fortune  to  occupy  the  same  relations  as  counsel  to 
the  latter,  as  I  now  occupy  toward  the  present  Committee.  The 
committee  of  1873  was  accorded  lengthy  hearings  by  both  branches 
of  Congress,  in  which  hearings  we  were  assisted  by  delegations 
from  the  Boards  of  Trade  of  Boston,  Philadelphia,  and  Baltimore, 
and  the  legislation  then  asked  for  at  the  hands  of  Congress,  was 
promptly  and  abundantly  given  in  the  law  known  as  the  Moiety 
Act  of  June  22d,  1874.  The  success  of  the  movement  made  at 
that  time  created  a  belief  in  the  minds  of  the  importers  that  their 
proper  redress,  when  wrongs  and  irregularities  became  greater 
than  they  could  bear,  was  to  appeal  directly  to  Congress. 

After  the  present  Committee  had  commenced  its  work,  your 
Commission  was  appointed.  To  what  extent  you  may  be  disposed, 
and  may  be  able,  to  assist  us  we  do  not  know  ;  but  we  believe 
that  so  far  as  you  can  help  our  cause,  you  will  most  willingly  do 
so,  and  we  further  believe  that  your  opinions  and  recommenda- 
tions will  have  great  influence  with  the  Treasury  Department. 
We  therefore  appear  before  you  to  state  the  result  of  our  work,  so 
far  as  it  has  been  completed  up  to  the  present  time,  and  to  name 
in  detail  what  modifications  in  existing  laws  and  regulations  our 
Committee  have  already  decided  upon  asking. 

I  feel  that  the  modifications  about  to  be  proposed  to  you  are 
entitled  to  peculiar  weight,  from  the  fact  that  we  know  that  they 
represent  the  wants  and  convictions  of  a  very  large  number  of 
our  leading  merchants.  Our  plan  has  been  to  place  ourselves  in 
direct  communication  with  the  principal  importers  of  the  city, 
and  to  submit  to  them  in  writing,  for  their  criticism,  such  changes 
as  are  proposed,  and  to  recommend  only  have  such  changes  as  re- 
ceived nearly  unanimous  approval.  Nearly  two  hundred  merchants, 
embracing  most  of  the  leading  firms  in  every  branch  of  business, 


7 


have  responded  to  these  letters,  and  have  expressed  in  writing 
usually  in  detail,  and  at  considerable  length,  their  views  touching 
these  proposed  changes.  These  letters  have  formed  the  basis  of 
the  modifications  which  I  am  about  to  present  to  you,  and  I  will 
indicate,  as  I  speak  of  the  various  proposed  changes,  the  propor- 
tionate number  of  merchants  approving  and  disapproving  of  each 
proposed  reform. 

The  machinery  for  the  collection  of  duties  on  imports  consists 
of  three  parts  :  two  of  statutory  law,  and  one  of  Treasury  regula- 
tions. The  two  of  statute  law  are,  first,  the  rates  and  amounts  of 
duties  to  be  levied,  and,  second,  the  methods  which  Congress  em- 
powers the  Executive  to  use  in  collecting  those  duties.  The  third 
part  consists  of  detailed  rules  and  instructions  of  the  Treasury 
Department,  consisting  of  a  great  variety  of  forms  and  regulations, 
which  emanate  from  the  Secretary  of  the  Treasury,  and  have  the 
sanction  of  statutory  law.  The  laws  regarding  the  rates  and 
amounts  of  duties,  this  Committee  does  not  propose  to  touch. 
For  their  present  purpose,  they  accept  as  a  fixed  fact,  that  the 
amounts  of  duties  realized  from  certain  commodities,  are  not  to 
be  interfered  with,  and  they  limit  themselves  to  the  single  task  of 
trying  to  simplify,  quicken,  and  cheapen  the  methods  of  collect- 
ing those  duties. 

I.  The  Abolition  of  the  JVaval  Office. 

The  first  change  suggested  by  the  Committee  is  the  abolition  of 
the  Naval  Office.  This  department  of  the  Custom  House  is  an 
expense  to  the  government  and  an  annoyance  to  the  importer, 
and  the  only  reason  for  continuing  it  is,  that  it  affords  a  check 
upon  the  Collector.  The  ground  taken  by  our  Committee  is,  that, 
with  competent  subordinates  in  the  Collector's  Office,  no  check  is 
necessary,  further  than  that  furnished  by  the  Treasury  Depart- 
ment. 

The  duties  of  the  Naval  Officer  are  set  forth  in  Section  2626  of 
the  Revised  Statutes.  The  duties  of  the  Collector  are  set  forth 
in  Section  2621.  These  two  officers,  so  far  as  the  duty  of  the 
Naval  Officer  extends,  perform  identically  the  same  work.  The 
Collector  receives  manifests  and  entries,  the  Naval  Officer  receives 
duplicates  of  them  ;  the  Collector  estimates  duties,  the  Naval  Offi- 
cer estimates  the  same  duties ;  the  one  records  these  estimates,  the 
other  also  records  them ;  the  one  signs  permits,  the  other  counter- 
signs the  same  permits ;  the  one  collects  money,  the  other  checks 
that  collection ;  the  one  disburses  money,  the  disbursement  is 


8 


checked  by  the  other ;  the  one  prepares  stated  accounts  and  re- 
ports, the  other  examines  and  certifies  these  accounts  and  reports. 
Whatever  the  Naval  Officer  does,  the  Collector  does.  The  office 
of  the  former,  so  far  as  it  goes,  is  an  exact  duplicate  of  that  of 
the  latter,  and  if  by  any  calamity  either  should  cease  to  exist, 
every  thing  connected  with  it,  to  the  last  detail,  could  be  supplied 
from  the  other. 

Let  me  illustrate  the  transactions  of  the  Naval  Office  by  recit- 
ing the  steps  taken  in  connection  with  an  entry  of  merchandise  at 
our  local  Custom  House.  When  an  importer  wishes  to  make  an 
entry,  he  himself  first  examines  the  invoice  and  the  bill  of  lading, 
and  prepares  two  entry  papers.  These  four  papers— to  wit,  the 
invoice,  the  bill  of  lading  and  the  two  entry  papers,  the  importer 
then  hands  to  the  Entry  Clerk  in  the  Collector's  office.  That  offi- 
cer, after  examining  the  papers,  hands  them  back,  together  with 
the  permit,  to  the  importer.  He  then  takes  his  four  papers  and 
the  permit  to  the  Naval  Officer,  by  whom  the  four  papers  are  sub- 
jected to  another  examination,  and  by  whom  the  permit  is  coun- 
tersigned. This  makes  three  examinations  of  the  four  papers : 
First,  by  the  importer,  whose  interest  and  safety  is  in  accuracy 
and  honesty  ;  second,  by  the  Entry  Clerk,  representing  the  Collec- 
tor ;  and,  third,  by  the  Naval  Officer.  The  next  step  taken  by  the 
importer  is  to  go  to  the  Deputy  Collector  to  make  oath  to  his 
entry,  and,  after  that,  he  goes  to  the  Cashier's  office  to  pay  the 
duties.  The  Cashier,  upon  payment  of  the  duties,  gives  to  the  im- 
porter the  permit,  the  other  papers  being  retained  in  the  Custom 
House.  The  importer,  next  and  finally,  goes  to  the  Deputy  Collector 
to  have  the  permit  signed,  and  that  signature  completes  the  entry. 
The  two  entry  papers  find  their  way,  one  to  the  files  of  the  Col- 
lector's office,  and  the  other  to  the  files  of  the  Naval  office.  The 
Collector  and  Naval  Officer  both  open  itemized  accounts,  each  on 
his  own  books,  with  all  the  merchandise  contained  in  the  entry  ; 
and  each  of  these  two  officials  spreads  upon  his  own  records  all 
the  details  connected  with  the  entry,  to  wit,  the  description  and 
value  of  the  merchandise,  the  rate  of  duty,  the  amount  of  duty, 
the  final  liquidation,  and  the  disposition  of  the  money  realized 
from  the  duties. 

The  importers  ask  that  this  irksome  and  complicated  system  of 
making  entries  may  be  simplified,  at  least  to  the  extent  of  abolish- 
ing the  Naval  Office  ;  and  the  tax-payers  ask  that  the  expense  of 
such  an  elaborate  scheme  for  correcting  errors  and  mistakes  may 
be  saved. 

If  the  theory  is  a  good  one,  that  there  should  be  duplicate  offices 


9 


wherever  large  transactions  are  carried  on,  why  is  not  such  a  the- 
ory adopted  by  individuals  and  corporations,  or  by  the  government 
with  reference  to  other  offices  besides  a  few  of  the  principal  Cus- 
tom Houses?  I  believe  that,  beginning  with  the  office  of  the 
Secretary  of  the  Treasury  and  ending  with  that  of  the  most  petty 
disbursing  officer,  no  similar  reduplication  can  be  found.  Certainly 
none  exists  in  the  organizations  of  private  enterprise.  If  the  gov- 
ernment proposes  to  insist  on  this  cumbersome  system  of  checks, 
why  not  apply  it  to  all  offices,  and  why  not  have  not  only  dupli- 
cate offices,  but  triplicates  as  well?  There  is  an  absurdity 
involved  in  the  mere  statement  of  such  a  proposition. 

There  are  no  Naval  Offices  at  most  of  the  ports  of  entry,  the 
number  of  such  offices  being  confined  to  a  few  of  the  leading 
ports.  I  see  no  reason  why  a  Naval  Officer  is  necessary  at 
one  port  and  not  necessary  at  another,  unless  it  be  that  the 
transactions  in  the  one  case  largely  exceed  in  gross  amount 
the  transactions  in  the  other.  That  reason  seems  inadequate.  If 
a  clerk  in  a  small  Custom  House  can  do  his  work  without  making 
mistakes,  a  clerk  in  a  large  Custom  House  can  do  the  same  ;  and 
we  believe  that  the  multitude  of  clerks  in  the  Collector's  Office,  if 
picked  solely  on  merit,  can  make  their  classifications  and  compu- 
tations without  requiring  another  and  independent  department  to 
do  their  work  over  after  them.  There  can  be  no  doubt  that,  with 
reference  to  at  least  a  part  of  the  work  performed  by  the  Naval 
Office,  namely,  the  recasting  of  the  Collector's  items  of  disbn la- 
ments, the  check  of  the  Naval  Office  is  useless,  both  in  theory  and 
in  practice.  We  believe  that  the  rest  of  the  work  performed  by  that 
department  is  not  worth  to  the  Government  the  expense  required 
to  sustain  it,  to  say  nothing  of  the  annoyance  to  merchants. 
It  is  therefore  proposed  to  abolish  the  Naval  Office  altogether. 

The  opinions  of  the  merchants,  so  far  as  any  are  expressed  in 
their  letters  to  the  Committee,  touching  this  proposal  to  abolish 
the  Naval  Office,  stand  as  follows  :  seventy  out  of  eighty-four  in 
favor  of  the  proposed  abolition. 

II.  Oaths  to  Entries  to  be  made  before  Notaries  and  Commissioners. 

The  next  proposed  change  is  that  oaths  to  entries  may  be  made 
before  any  Notary  Public  or  United  States  Commissioner.  This 
change  is  suggested  simply  for  the  convenience  of  the  merchant. 
The  present  law,  which  is  found  in  section  2841  of  the  Revised 
Statutes,  necessitates  the  personal  attendance  of  the  principal  at 
the  Custom  House,  which,  in  a  city  of  large  distances,  is  often  a 


10 


matter  of  great  inconvenience,  and  causes  a  loss  of  time  at  the 
most  valuable  part  of  the  day.  Moreover,  importers  are  frequently 
delayed,  after  they  have  reached  the  Custom  House,  while  waiting 
to  be  sworn. 

As  the  oath  is  now  administered,  and  as  it  probably  always 
will  be  administered,  the  taking  of  the  oath  is  but  the  merest  form. 
There  are  no  surroundings  at  the  Custom  House  adequate  to  give 
gravity  to  the  occasion,  but,  on  the  contrary,  the  necessity  for 
rapid  work  and  the  vast  number  of  oaths  administered  during 
business  hours  unite  to  deprive  the  act  of  all  solemnity. 

This  proposed  change  finds  substantially  unanimous  approval 
in  the  letters  received,  by  the  Committee,  while  eight  firms,  includ- 
ing three  of  the  heaviest  importing  houses  in  the  city,  favor 
the  total  abolition  of  all  oaths  on  entries,  on  the  ground  that, 
wherever  taken,  they  are  apt  to  be  an  empty  form,  that  no  one 
was  ever  punished  for  taking  a  false  oath  on  an  entry,  that  they 
tend  to  bring  the  solemnity  of  taking  oaths  into  contempt,  and 
that  they  are  generally  abolished  by  other  nations.  One  other 
firm,  one  of  the  oldest  and  wealthiest  in  the  city,  suggests  that 
oaths  be  entirely  abolished,  and  that  there  be  a  provision  of  law 
whereby  the  signature  to  such  documents  as  now  require  oaths 
shall  carry  with  it  all  the  force  and  be  invested  with  all  the  penal- 
ties now  attaching  to  an  oath. 

If  oaths  are  to  be  continued,  let  the  convenience  of  the  importer 
be  consulted  by  allowing  him  to  appear  before  any  official  compe- 
tent to  administer  oaths  to  be  used  in  the  courts  of  the  State  or 
of  the  United  States.  There  can  be  no  injury  to  the  government, 
beyond  the  loss  of  the  petty  fees. 

ZZZ  The  Abolition  of  Triplicate  Invoices. 

The  Committee  suggest  the  abolition  of  the  present  system  of 
triplicate  invoices  as  provided  for  in  section  2853  of  the  Revised 
Statutes. 

This  system  of  triplicate  invoices  was  originated  by  the  Act  of 
March  3d,  1863,  prior  to  which  time,  triplicate  invoices  had  never 
been  required.  The  system  was  meant  to  be  an  improvement  on 
the  Act  of  March  1st,  1823,  which  necessitated  simply  the  produc- 
tion by  the  importer  of  a  single  invoice. 

Triplicate  invoices  are  a  source  of  expense,  because,  under  ex- 
isting laws,  at  least  four  copies  must  be  made — three  for  the  gov. 
eminent,  and  one  for  the  merchant  himself  ;  and  each  copy  must 
be  written  out  by  itself,  no  press  copies  being  allowed.  Triplicates 


11 


are  also  a  source  of  delay  in  shipping  goods.  This  is  emphatically 
true  under  the  existing  custom  of  ordering  goods  by  cable,  on  the 
eve  of  the  sailing  of  a  particular  steamer,  when  there  is  often  not 
time  enough  to  multiply  invoices,  in  offices  employing  but  a  limited 
clerical  force.  Merchants  complain  that  the  secrets  of  their  busi- 
ness are  often  exposed,  the  one  of  the  triplicates  filed  for  preser- 
vation in  the  Consular  Office,  being  usually  accessible  to  rivals  in 
business. 

IV.  The  Abolition  of  Consular  Certificates. 

Triplicate  invoices  and  consular  certificates,  being  parts  of  the 
same  system,  should  be  treated  together.  The  Committee  pro- 
pose the  abolition  of  triplicate  invoices,  also  of  the  foreign  decla- 
ration to  accompany  one  of  the  triplicates,  also  of  the  consular 
certificate,  all  provided  for  in  sections  2853  to  2855  of  the  Re- 
vised Statutes. 

Consular  certificates  on  all  invoices  were  not  required  prior  to 
the  Act  of  July  14th,  1862.  That  Act  was  repealed  by  the  Act  of 
March  3d,  1863,  which  originated  the  system  of  triplicate  invoices. 
The  theory  of  this  system  is  perhaps  a  good  one.  It  is  that  a 
consul  becomes  an  agent  of  the  government  to  collect  information 
relating  to  imports,  and  to  collect  samples  of  all  goods  shipped  to 
the  United  States,  and  that  he  will  make  himself  an  authority 
upon  market  values,  and  will  so  familiarize  himself  with  the  prices 
of  goods,  by  a  comparison  of  invoices  and  otherwise,  as  to  make 
himself  a  skilled  instrument  in  detecting  and  preventing  frauds. 

It  is  generally  admitted  that  this  system,  however  good  in  theory, 
is  practically  a  failure.  Consuls  do  not  become  experts  in  value, 
nor  do  they  regularly  collect  and  forward  samples,  nor  are  they 
efficient  instruments  in  discovering  frauds  ;  even  the  revenue 
officials  themselves  paying  but  little  attention  to  the  statements  of 
consuls,  and  rarely  giving  to  their  certificates  any  consideration. 
It  is  not  too  much  to  say  that  every  importer  can  from  his  own 
experience  furnish  instances  showing  the  ignorance  and  inefficiency 
of  consuls  touching  the  revenue  laws  and  their  administration,  the 
letters  received  by  the  Committee  containing  numerous  illustra- 
tions of  this  kind. 

Two  complaints  are  made  against  this  system — to  wit  :  the  ex- 
pense to  the  merchant,  and  the  delay.  The  expense  is  now  a  larger 
item  than  it  was  formerly  when  there  were  less  facilities  for  order- 
ing goods,  and  when  invoices  were  less  frequent  and  of  larger 
amounts.    The  statute,  section  2851,  authorizes  a  fee  of  $2.50  for 


12 


a  certificate,  and  that  amount  is  usually  increased  by  another  dol- 
lar, by  local  usages. 

Delays,  however,  are  a  more  serious  complaint.  Before  mer- 
chandise can  be  shipped,  three  invoices  must  be  made  out  for  the 
consul,  and  his  certificate  must  be  obtained.  If  for  any  reason  he 
is  absent  from  his  post,  or  if  his  office  hours  are  either  very  short 
or  are  not  strictly  observed,  the  merchant  may  lose  the  opportu- 
nity of  making  his  shipment  on  a  certain  day.  The  telegraph  has 
revolutionized  the  system  of  doing  business  within  the  last  few 
years.  Instead  of  large  importations  made  at  the  beginning  of 
each  season,  frequent  and  small  orders  are  now  sent  by  cable, 
often  with  reference  to  the  sailing  of  particular  steamers.  Into 
the  merchant's  calculations  as  to  whether  his  goods  will  be  shipped, 
there  enters,  under  the  present  system  of  triplicates  and  consular 
certificates,  the  uncertain  quantity  of  the  length  of  time  that  may 
be  required  to  pass  his  invoices  through  the  consulate. 

The  power  to  detain  invoices  is  another  serious  objection  to  the 
present  system.  It  is  given  to  consuls  by  section  2862  of  the  Re- 
vised Statutes.  This  discretionary  power  is  sometimes  abused, 
causing  expense  and  vexatious  delays  to  merchants,  without  any 
adequate  benefit  to  the  revenue. 

Our  Committee  recommend  that  the  entire  system  of  triplicates, 
declarations,  and  certificates  be  abolished,  and  that  the  substantial 
provisions  of  the  Act  of  1823  be  revived.  Under  that  Act,  entry 
was  made  on  an  invoice  verified  by  the  owner  of  the  goods,  such 
verification  being  made  in  this  country  if  the  owner  was  here,  or 
before  a  foreign  consul  if  the  owner  was  abroad.  The  substantial 
requirement  Avas  simply  this  :  that  entry  should  be  made  on  a 
sworn  invoice  verified  by  the  actual  owner  of  the  goods,  wherever 
he  might  be. 

Ninety-seven  merchants  have  expressed  their  views  in  writing 
on  the  proposition  to  abolish  this  system,  ninety-two  being  in 
favor  of  the  proposed  abolition,  and  five  being  opposed  to  it. 

V.  The  Payment  of  Duties  in  Certified  Gold  Checks. 

The  next  modification  is  that  duties  may  be  made  payable  in 
certified  gold  checks.  Under  the  existing  custom  the  merchant 
takes  to  the  Custom  House  the  gold  itself  to  pay  the  duty.  This  is 
both  inconvenient  and  dangerous.  If  he  intrusts  his  money  to  a 
Custom-House  broker,  he  takes  the  chance  of  the  broker's  dishon- 
esty. Some  means  should  be  devised  to  avoid  the  necessity  of 
paying  the  money  in  specie.    One  importer  suggests  that  the 


13 


United  States  Treasurer  might  be  authorized  to  receive  gold  from 
the  merchants,  and  to  issue  against  it  certificates  of  deposit  payable 
to  the  order  of  the  Collector.  Another  merchant  suggests  that 
the  Collector  might  designate  certain  banks,  the  certified  gold 
checks  on  which  would  be  taken  for  duties.  Still  another  mer- 
chant suggests  that  certified  gold  checks  might  be  taken  subject 
to  the  discretion  of  the  Collector,  thus  leaving  him  free  to  protect 
the  government  in  times  of  financial  panic. 

In  this  connection  it  should  be  remembered  that  for  many  years 
the  government  not  only  took  checks  in  payment  of  duties,  but 
also  took  promissory  notes  running  on  long  time. 

Our  Committee  believe  that  some  improvement  should  be  made 
in  this  matter,  and  have  concluded  to  recommend  the  payment  in 
certified  gold  checks,  a  proposition  which  meets  with  nearly  the 
unanimous  approval  of  importers. 

VI.  Entries  to  be  passed  Same  Day  the  Papers  are  left  at  the 

Custom  House. 

We  propose  that  a  Treasury  regulation  shall  be  made  requir- 
ing entries  to  be  passed  the  same  day  they  are  left  at  the  Custom 
House.  This  proposition  meets  with  the  unanimous  approval  of 
the  merchants  ;  many  of  the  importers,  however,  in  expressing  in 
their  letters  their  views  on  this  point,  state  that  they  have  no 
cause  for  complaint  in  this  regard,  their  entries  having  been  gen- 
erally passed  promptly. 

VII.  A  Change  from  Ad  Valorem  to  SpecAfic  Duties. 

The  Committee  recommend  a  change  so  far  as  practicable  from 
ad  valorem  to  specific  duties.  No  recommendation  proposed  by 
the  Committee  has  excited  so  much  interest  among  the  importers 
as  this.  There  seems  to  be  a  unanimous  feeling  in  favor  of  some 
change  to  specific  duties,  the  only  difference  of  opinion  being  as 
to  how  far  such  a  change  is  practicable.  Many  merchants  com- 
plain that  their  lines  of  business  are  entirely  ruined  by  the  frauds 
perpetrated  under  ad  valorem  duties,  and  that  a  change  to  specific 
duties  is  a  question  of  life  and  death  with  them. 

The  principles  lying  at  the  bottom  of  such  a  change  are  too  vast 
to  be  discussed  in  this  connection,  the  scope  of  my  remarks  requir- 
ing me  simply  to  state  such  reasons  as  have  induced  the  Com- 
mittee to  make  the  recommendation. 

The  reasons  for  this  proposed  change  are  as  follows  :  first,  the 


14 


Committee  believe  that  the  same  amount  of  revenue  can  be  col- 
lected under  specific  duties  as  under  ad  valorem  duties,  and  that 
such  revenue  can  be  collected  at  much  less  expense  ;  second, 
undervaluation  will  be  prevented,  and  thus  one  of  the  great  sources 
of  fraud  will  be  cut  off ;  again,  specific  duties  will  compel  the 
payment  of  like  duties  on  like  goods  at  all  the  different  custom 
houses  ;  lastly,  there  will  be  no  possible  premium  on  dishonesty, 
in  making  out  invoices,  and  the  honest  merchant  will  no  longer  be 
compelled  to  pay  higher  rates  of  duties  than  the  dishonest  mer- 
chant. It  is  generally  conceded  that,  unless  ad  valorem  duties  are 
abolished,  especially  on  goods  paying  high  rates  of  duty,  honest 
merchants  will  be  driven  from  business. 

The  vote  of  the  merchants  on  this  proposition,  as  appears  by  the 
letters  received  from  them  by  the  Committee,  is  as  follows  : 
one  hundred  and  sixteen  in  favor  of  the  proposed  change  to  specific 
duties,  and  five  against  such  change. 

Many  importers  who  have  written  us  letters  decline  to  ex- 
press any  opinion  whatever  on  this  point,  owing,  they  say, 
to  lack  of  special  knowledge.  The  opinions  of  the  five  firms  vot- 
ing against  the  change  to  specific  duties  are  as  follows  :  Two  firms 
object  to  specific  duties  on  the  ground  that  they  are  not  practica- 
ble in  their  lines  of  business;  two  other  firms,  including  one  of 
the  heaviest  importing  houses  in  the  city,  advocate  a  total  aboli- 
tion of  mixed  duties,  but  think  that  ad  valorem  duties,  with 
competent  appraisers,  are  preferable  to  specific  duties  ;  while 
the  opinion  of  the  other  importer  is  that,  with  honest  and  effi- 
cient officials,  ad  valorem  duties  are  more  simple  and  easy  of  ad- 
ministration. 

VIII.  The  Government  to  Retain  in  its  Discretion  the  Whole  or 
Any  Part  of  an  Invoice  for  not  more  than  Ten  Days. 

The  next  suggestion  of  the  Committee  is  that  the  government 
shall  take  physical  possession  of  the  entire  invoice  upon  its 
arrival,  and  shall  keep  the  whole  of  the  same,  or  as  much  of  the 
same  as  it  may  choose,  for  a  period  of  ten  days,  during  which  time 
it  shall  examine  and  appraise  the  goods  ;  and  shall,  at  the  expira- 
tion of  the  ten  days,  deliver  the  entire  shipment  to  the  merchant, 
together  with  his  bill  for  duties.  The  object  of  this  change  is  to 
prevent  delays  in  examining  and  appraising  goods,  to  compel 
officials  to  do  their  duty  promptly,  by  giving  them  only  a  fixed 
time  within  which  to  perform  it,  and  to  enable  the  importer  to 
know  with  absolute  certainty  just  when  he  will  get  his  goods,  so 


15 


that  lie  may  make  sales  with  confidence  as  to  his  ability  to  deliver 
what  is  sold. 

The  present  system  exists  under  sections  2789,  2899,  and  2901 
of  the  Revised  Statutes.  The  principal  objection  to  this  proposed 
change  will  probably  be  found  under  the  provisions  of  section 
2789.  That  section  provides  that  whenever  an  entry  of  merchan- 
dise is  imperfect  for  want  of  invoices,  bills  of  lading,  or  for  any 
other  cause,  the  Collector  shall  take  the  merchandise,  and  detain 
it  in  his  own  custody.  It  sometimes  happens  that  unavoidable 
delays  occur  in  making  entries,  and  in  such  cases,  it  may  be  said, 
it  would  be  impossible  for  the  Collector  to  deliver  the  merchan- 
dise within  ten  days.  Our  answer  to  that  objection  is  that  in  such 
cases  the  Collector  shall  take  samples  of  the  goods,  and  shall  re- 
quire a  bond  for  double  the  amount  of  the  invoice,  and  shall  then, 
within  the  limitation  of  ten  days,  deliver  the  goods  to  the 
importer. 

This  plan  meets  with  very  general  approval,  and  is  in  substance 
confirmed  by  most  of  the  merchants  who  have  sent  us  written 
communications,  those  favoring  the  change  being  in  the  proportion 
of  thirteen  in  favor,  to  one  against,  seventy-nine  voting  for  the 
change  and  six  against  it. 

IX.  Completion  of  Liquidation  of  Entry  within  Thirty  Days. 

Complaints  are  frequent  touching  delays  in  final  liquidations  of 
entries.  One  merchant  has  sent  us  a  memorandum  of  his  recent 
experience,  where  an  entry  was  not  liquidated  until  five  years 
after  it  was  made.  This  is  an  extreme  case,  but  delays  of  many 
months,  indeed  of  one  year,  are  common.  Where  such  delays 
occur,  merchants  never  know  when  they  are  through  paying  duties 
on  an  importation, and  can  never  tell  how  they  stand  with  reference 
to  any  one  transaction.  There  seems  to  be  no  good  reason  why 
the  government  should  not  be  compelled  by  statute  to  complete 
its  liquidation,  and  to  render  a  final  bill  for  duties  to  the  merchant, 
within  a  limited  time,  which  should  not  be  longer  than  thirty 
days.  It  may  here  be  remarked  with  reference  to  all  limitations 
of  time,  both  in  this  immediate  connection  and  elsewhere,  that 
under  the  present  facilities  for  doing  business,  more  can  be  accom- 
plished by  the  merchant  within  a  certain  number  of  days  than 
could  have  been  accomplished  in  the  same  number  of  days  when 
most  of  the  existing  laws  were  enacted,  and  that  consequently 
limitations  of  time  should  be  shortened. 


16 


The  expressions  of  opinion  by  merchants,  in  their  letters,  on  this 
proposed  change,  are  unanimous  in  favor  of  the  completion  of  liqui- 
dation of  entries  within  thirty  days. 

X.  The  Abolition  of  Petty  Fees,  including  Fees  for  Permits  and 

Entries. 

A  number  of  petty  fees  are  now  collected  which  realize  but 
little  revenue  to  the  government,  and  are  a  source  of  delay  and 
annoyance  to  the  importer.  The  Committee  suggest  that  all  of 
such  fees  be  abolished,  and  that  all  of  section  2654  of  the  Revised 
Statutes,  beginning  with  the  sixth  item  and  ending  with  the 
eleventh,  be  repealed. 

This  proposed  change  meets  with  the  unanimous  approval  of  the 
merchants. 

XI.  Duties  should  always  be  assessed  on  Market  Value. 

The  next  suggestion  of  the  Committee  is  that  duties  should 
always  be  assessed  on  market  value  at  period  of  exportation,  re- 
gardless of  cost.  This  suggestion  is  made  with  reference  to  ad 
valorem  duties,  and,  like  some  other  suggestions  now  made  by  the 
Committee,  would  have  no  force  if  all  duties  should  be  made 
specific.  It  is  difficult  to  discuss  this  point  within  the  brief  time 
allotted  to  me.  I  shall  therefore  content  myself  with  a  brief  state- 
ment of  the  existing  law,  and  of  the  necessity  for  the  proposed 
change. 

The  present  law  is  contained  in  sections  2845  and  2900  of  the 
Revised  Statutes.  Under  that  law,  duty  is  now  assessed  on  mar- 
ket value  if  it  is  higher  than  invoice  price,  but  on  invoice  price  if 
the  same  is  higher  than  market  value.  That  is  to  say,  the 
importer  may  not  be  safe  in  paying  duty  on  what  his  goods  cost 
him.  If  the  goods  shall  have  advanced  in  the  foreign  market, 
after  his  purchase  and  before  he  makes  shipment,  he  must  pay 
duty  on  such  advanced  value  ;  but  if  the  goods  shall  have  de- 
clined in  the  same  time,  so  that  market  value  is  less  than  cost 
price,  he  must  then  pay  duty  on  the  cost.  This  rule  works  only 
one  way  :  if  the  market  value  advances,  the  government  gains  by 
it,  but  if  the  market  value  declines,  the  merchant  loses  by  it. 

The  inequality  and  hardship  of  this  provision  is  manifest.  The 
rule  works  entirely  in  favor  of  the  small  buyer  who  purchases  at 
the  date  of  shipment,  and  entirely  against  the  large  buyer  who 
gives  his  orders  far  in  advance,  and  who  may  find,  from  a  decline 


17 


in  market  value,  that  the  duties  on  his  goods  are  far  in  excess  of 
those  paid  by  his  competitor. 

This  inequality  in  the  law  has  frequently  operated  as  a  trap  to 
catch  innocent  merchants.  The  laws  for  making  false  entries  are 
very  severe,  causing  the  forfeiture  of  entire  invoices  where  entries 
do  not  state  the  exact  facts  in  the  ease.  Thus  some  technical 
knowledge  of  the  customs  laws  is  needed,  to  know  that  under 
some  circumstances,  a  merchant  subjects  himself  to  a  heavy  penalty 
when  he  enters  his  goods  at  actual  cost,  and  pays  duties  in 
good  faith  on  the  sum  which  he  has  actually  paid  for  them.  Such 
a  law  is  unreasonable,  and  the  only  way  to  secure  importers  from 
the  penalties  of  evading  it  is  to  repeal  the  law  altogether. 

This  proposed  change  has  received  lengthy  discussion  in  many 
of  the  letters  received  by  the  Committee,  and  meets  with  unani- 
mous approval. 

• 

XII.  The  Custom  House  should  be  kept  open  from  Nine  to  Four. 

Your  Commission  has  anticipated  our  Committee  in  its  next 
suggestion,  which  is  that  the  Custom  House  shall  be  kept  open 
from  nine  to  four.  I  need  hardly  say  that  this  recommendation 
meets  with  the  unanimous  approval  of  our  correspondents. 
Several,  however,  suggest  that  the  hour  for  closing  should  be  ex- 
tended until  five  o'clock. 

XIII.  The  Reduction  of  Charges  at  General  Order  Stores,  also 

for  Cartage. 

The  Committee  believe  that  the  charges  for  storage  at  general- 
order  stores,  and  the  charges  for  cartage,  should  be  reduced. 
We  have  received  from  merchants  a  number  of  complaints.  One 
importer  states  that  where  his  goods  have  been  in  the  hands  of  the 
storekeeper  for  only  a  single  hour,  he  has  been  charged  for  a 
month's  storage  ;  and  he  states  that  such  is  the  rule  and  custom. 
Another  importer  suggests  that  there  should  be  no  charge  for  less 
than  three  days,  and  that  charges  should  be  scaled  on  the  basis  of 
a  separate  charge  for  every  third  of  a  month.  Several  letters 
contain  the  statement  that  when  goods  are  landed,  they  are  in- 
tentionally rushed  from  the  vessel,  before  the  merchant  has 
reasonable  opportunity  to  make  his  entry  and  pay  his  duties,  in 
order  that  storage  charges  may  accrue. 

The  charges  for  cartage  are  generally  believed  to  be  excessive, 
2 


18 


and  out  of  proportion  to  the  charges  of  private  cartmen  for  similar 
services. 

As  an  evidence  of  the  necessity  for  a  reduction  in  these  charges, 
I  am  able  to  state,  that  every  merchant  who  has  sent  us  his 
opinion  on  the  matter,  thinks  that  reductions  should  be  made. 

XIV.  The  Prompt  Filing  of  Weighers'  and  Gangers'  Returns. 

The  Committee  further  recommend  a  rigid  enforcement  of  the 
regulation  providing  for  the  prompt  filing  of  weighers'  and  gan- 
gers' returns.  There  is  frequent  complaint  of  delays  in  this  matter. 
Merchants  state  that  they  are  often  unable  to  ship  their  goods  by 
vessels  upon  which  freight  has  been  taken,  owing  to  the  delay 
in  getting  their  returns.  One  of  the  leading  firms  in  the  city 
complains  that  they  often  have  to  wait  from  three  to  four  weeks, 
for  the  liquidation  of  specific  duties,  owing  to  the  delay  in  the 
filing  of  the  weighers'  returns. 

This  proposition  meets  with  the  unanimous  endorsement  of  our 
correspondents. 

XV.  The  Total  Abolition  of  Damage  Allowances. 

The  next  recommendation  of  the  Committee  is  that  damage 
allowances  be  abolished,  and  that  all  laws  providing  therefor  be 
repealed.  I  am  authorized  to  state  that  on  this  proposed  change 
the  Committee  entertain  doubts,  but  that,  for  present  purposes,, 
they  embrace  it  among  their  other  suggestions. 

It  appears  that  in  some  lines  of  trade  gross  frauds  are  perpe- 
trated under  the  provisions  of  the  law  for  damage  allowances, 
dishonest  merchants  obtaining  excessive  credits  for  fictitious 
damages,  and  thereby  underselling  their  honest  competitors.  On 
the  other  hand,  it  is  said,  it  would  be  the  grossest  injustice  to  compel 
payment  of  full  duties  on  partially  worthless  goods,  and  that  such 
an  injustice  outweighs  the  probable  frauds  perpetrated. 

There  are  strong  reasons  both  for  and  against  this  recommenda- 
tion. Merchants  themselves  are  nearly  equally  divided  upon  it. 
In  this  matter,  dealers  are  peculiarly  influenced  by  the  nature  of 
the  business  in  which  they  are  themselves  engaged,  although,  with 
reference  to  one  branch  of  business,  we  find  two  leading  houses 
advocating  with  earnestness  the  opposite  sides  of  the  proposed 
change. 

It  has  been  suggested  to  the  Committee  that  importers  can  insure 
against  loss  of  duty  on  account  of  damage.    The  possibility  of  in- 


19 


suring  against  such  loss  is  disputed  with  reference  to  some 
branches  of  trade  ;  but  it  is  safe  to  assume,  that  if  damage  allow- 
ances are  abolished,  some  means  will  be  devised  whereby  sub- 
stantial insurance  can  be  obtained.  This  question,  however,  will  be 
more  fully  discussed  before  you  by  the  Chairman  of  our  Committee. 

Most  of  the  merchants  who  have  sent  letters  to  the  Committee 
have  expressed  opinions  on  this  proposed  change.  These  opinions 
are  about  equally  divided  on  the  question  of  the  total  repeal  of  all 
damage  allowances. 

XVI.  The  Reduction  of  Penal  Bonds  from  Double  the  Value  oj 

the  Goods  to  Once  the  Value  of  the  Goods. 

The  Committee  recommend  that  penal  bonds  be  reduced  from 
double  the  value  of  the  goods  to  once  the  value  of  the  goods. 
The  present  law  on  this  matter  is  found  in  section  2899  .  of  the 
Revised  Statutes.  The  Committee  believe  that  the  government 
will  be  amply  secured  by  a  bond  for  the  reduced  amount,  and  that 
merchants,  especially  those  of  small  means,  will  be  materially 
benefited  by  such  reduction. 

XVII.  No  Charge  whatever  to  the  Importer  for  Cartage  or  Other 

Expenses  on  Goods  entered  for  Consumption. 

The  next  recommendation  of  the  Committee  is  that  there  should 
be  no  charge  whatever  to  the  importer  for  cartage  or  other  ex- 
penses, where  goods  are  entered  for  consumption.  This  recom- 
mendation is  made  on  the  principle  that  when  the  merchant  gives 
his  goods  to  the  government,  asking  the  government  to  tell  him 
how  much  duties  he  has  to  pay,  and  to  then  give  him  back  his 
goods  upon  his  paying  the  same,  the  government  shall  bear  the 
entire  expense  of  getting  at  the  amount  of  duties,  and  shall  make 
no  charge  whatever  to  the  merchant  except  for  the  duties  them- 
selves. 

This  proposed  change  is  approved  by  all  the  merchants  who 
have  expressed  their  opinions  to  the  Committee  on  the  same,  with 
a  single  exception.  This  one  firm  thinks  that  merchants  should 
not  object  to  paying  charges,  provided  the  charges  are  reduced 
to  a  reasonable  amount  for  the  service  rendered. 

XVIII.  The  Law  for  discharging  Export  Bonds  should  be 

Simplified. 

The  Committee  recommend  that  the  existing  laws  for  the  dis- 
charge of  export  bonds  should  be  amended.    The  present  law  is 


found  in  sections  3044  and  3045  of  the  Revised  Statutes.  Under 
this  law  the  export  bond  cannot  be  discharged,  except  on  the  fol- 
lowing conditions  :  first,  a  certificate  of  the  consignee  at  the 
foreign  port  must  be  produced  ;  second,  a  certificate  under  the 
hand  and  seal  of  the  consul  must  be  produced  ;  third,  these  two 
certificates  just  named  must  be  confirmed  by  the  oath  of  the 
master  of  the  vessel  ;  and  fourth,  these  two  certificates  must  also 
be  confirmed  by  the  oath  of  the  mate  of  the  vessel.  There  are 
also  cumbersome  provisions  for  supplying  certificates  and  oaths  in 
exceptional  cases. 

The  Committee  recommend  that  this  elaborate  system  shall  be 
simplified,  and,  although  they  have  not  fully  agreed  upon  the 
exact  nature  of  the  amendments,  they  nevertheless  suggest,  for 
present  purposes,  that  the  oath  of  the  master  and  the  mate  be 
abolished. 

This  matter  meets  with  the  unanimous  approval  of  the  mer- 
chants. 

Grt'ttrr  Fur  tilth:*  for  tJt>-    TTit/idrtnctt?,  by  the  Buyer,  of 
Goods  purchased  ichile  in  Bond, 

The  Committee  suggest  an  increase  of  facilities  for  the  with- 
drawal, by  the  buyer,  of  goods  purchased  while  in  bonded  ware- 
house. 

The  present  law  is  found  in  sections  2970  and  2971  of  the  Re- 
vised Statutes,  and  in  article  617  of  the  Treasury  Regulations. 
Under  the  present  law,  the  purchaser  of  goods  in  bond  finds  great 
difficulty  in  making  a  withdrawal  of  a  fractional  part  of  his  pur- 
chase. Furthermore,  existing  laws  and  regulations  do  not  allow 
the  transfer  on  the  books  of  the  Custom  House  of  bonded  goods 
purchased  from  the  person  who  originally  made  the  entry.  It  is 
true  a  withdrawal  entry  is  provided  for  by  form  number  125  of 
the  Treasury  Regulations,  whereby  the  importer  can  authorize 
the  person  to  whom  he  has  sold  the  goods,  to  withdraw  the  same  ; 
but  this  withdrawal  entry  might  not  prevent  the  importer  from 
subsequently  withdrawing  the  goods  himself,  upon  paying  the 
duties,  and  thereby  defrauding  the  party  to  whom  the  goods  have 
been  sold. 

The  Committee  propose  that  a  certificate  be  issued  by  the  Col- 
lector when  goods  have  been  deposited  in  bonded  warehouse,  and 
that  the  holder  of  such  certificate,  and  none  other,  shall  be  allowed 
to  withdraw  the  goods.    When  such  a  certificate  is  issued,  the 


21 


Collector  can  close  the  account  on  his  books  with  the  original 
entry,  and  can  open  a  new  account  with  the  certificate. 

Under  such  a  certificate,  goods  could  be  withdrawn  by  a  pur- 
chaser from  an  importer,  in  such  quantity  as  the  purchaser  himself 
might  choose,  in  the  same  manner  as  they  can  now  be  withdrawn 
by  the  original  importer.  Another  advantage  of  such  a  certificate 
would  be  that  it  would  afford  reliable  security  upon  which  ad- 
vances might  safely  be  made  on  goods  in  bond.  It  is  doubtful 
whether,  under  the  existing  system,  a  person  making  advances  on 
goods  in  bond,  and  simply  holding  a  withdrawal  entry,  has  abso- 
lute security  ;  and  whether  dishonesty  or  insolvency  on  the  part 
of  the  importer,  might  not  defeat  the  title  of  the  person  making 
the  advances. 

Such  merchants  as  have  expressed  an  opinion  to  the  Committee 
on  this  point,  are  unanimously  in  favor  of  this  suggestion. 

JlJl.  The  Government  should  pay  Interest  and  Costs  on  Judg- 
ments, the  same  as  other  Defendants. 

Our  next  recommendation  is  that  when  judgments  are  recovered 
against  the  Collector  for  duties  paid  under  protest,  the  govern- 
ment should  pay  interest  and  costs,  the  same  as  other  defendants. 

Whenever  judgment  is  recovered  by  an  importer  against  the 
Collector,  it  means  that  more  money  has  been  taken  for  duties 
than  was  due,  and  that  the  Collector  must  refund  the  same  ;  and 
if  the  Collector  has  acted  under  the  instructions  of  the  Secretary 
of  the  Treasury  in  making  the  collection,  the  United  States,  under 
a  special  statute,  are  liable  for  the  amount  of  the  judgment.  It 
has  heretofore  been  the  custom  to  satisfy  such  judgments, 
together  with  interest  and  costs,  from  either  the  standing  customs 
appropriation,  or  out  of  any  money  in  the  Treasury  not  otherwise 
appropriated.  The  present  ^Secretary  of  the  Treasury,  however, 
has  decided  that,  under  his  interpretation  of  existing  laws,  he  has 
no  power  to  pay  interest  and  costs  on  judgments  obtained  against 
the  government,  except  from  a  special  appropriation  by  Congress. 
He  claims  that  he  can  only  repay,  from  the  regular  appropriation, 
the  amount  of  the  duties  exacted. 

The  Committee  propose  that  the  room  for  doubt  regarding  the 
meaning  of  the  law  shall  be  removed  by  a  positive  enactment,  and 
they  recommend  that  Sections  989  and  3012^  of  the  Revised  Stat- 
utes be  amended  to  conform  with  this  proposed  change. 

This  recommendation  meets  with  the  general  approval  of  our 
correspondents. 


22 


JCJTI.  One  of  the  Bonds  now  required  where  Goods  are  entered 
for  Inland  Transportation  should  be  Abolished. 

The  next  recommendation  of  the  Committee  is  that  where  goods 
are  entered  for  inland  transportation,  one  of  the  two  bonds  now 
required  should  be  abolished. 

The  existing  law  is  contained  in  Sections  2992  and  2993  of  the 
Revised  Statutes.  These  sections  provide  that  where  goods  are 
destined  for  an  inland  port  of  entry,  a  bond  of  transportation  shall 
be  given  in  a  penal  sum  of  at  least  double  the  invoice  value  of  the 
merchandise,  with  the  duties  added  ;  and,  also,  that  before  the 
merchandise  shall  be  delivered  to  the  common  carrier,  such  carrier 
shall  also  execute  a  bond  to  the  United  States.  It  is  suggested 
that  the  bond  of  the  common  carrier  is  sufficient,  and  that  the 
bond  of  the  importer  should  be  abolished,  for  the  reason  that  the 
government  is  amply  secured  against  the  loss  of  the  goods  by  the 
bond  of  the  carrier,  and  that  any  possible  loss  which  may  occur 
can  be  satisfied  out  of  that  bond. 

This  proposition  has  called  forth  a  wide  range  of  discussion 
touching  the  present  system  of  inland  ports  of  entry,  and  I  take 
this  occasion  to  say  that  a  very  general  and  a  very  sincere  conviction 
prevails  in  the  minds  of  our  local  importers  that  interior  ports  of 
entry  should  be  abandoned.  I  omit,  however,  any  discussion  of  this 
point,  and  any  citation  of  opinions  submitted  by  the  merchants  to 
the  Committee,  for  the  reason  that  they  are  not  within  the  scope  of 
our  inquiry. 

All  the  merchants  who  have  expressed  opinions  on  this  proposed 
change  agree  in  recommending  it. 

XXII.  Entry  Papers  shoidd  be  taken  Entire  Charge  of  by  the 

Custom  House. 

The  Committee  advise  that  when  entries  are  made  at  the  Cus- 
tom House,  all  the  papers  used  in  making  the  entries  should 
be  taken  entire  charge  of  by  customs  officials,  from  the  time 
of  presentation  to  the  time  of  payment  of  duty  or  the  granting 
of  a  permit  for  bonding.  Under  the  present  custom,  merchants 
must  attend  in  person,  or  through  their  clerks  or  brokers,  and 
must  carry  their  papers  from  one  desk  to  another  until  the  entries 
are  completed.  The  various  steps  incidental  to  an  entry  under 
the  existing  system,  have  been  already  recited  by  me  at  the  begin- 
ning of  my  address,  when  I  discussed  the  proposed  abolition  of 
the  Naval  Office. 


23 


The  Committee  propose  that  when  an  entry  is  handed  in,  it  shall 
be  taken  charge  of  by  officials,  and  the  merchant  shall  have  noth- 
ing further  to  do  with  it  until  it  is  handed  back  to  him  for  pay- 
ment of  duties  or  for  procuring  the  permit  for  bonding.  This 
change  will  save  annoyance  and  expense  to  the  merchant,  will 
simplify  the  making  of  an  entry,  and  will  prevent  confusion  and 
possible  favoritism  in  making  entries  at  the  Custom  House. 

The  expressions  of  opinion  of  the  merchants  on  this  point  are 
nearly  unanimous  in  favor  of  it. 

XXIII.  The  Equalization  of  Appraisements  at  the  Different  Ports. 

The  last  proposed  change  in  existing  laws  which  the  Committee 
have  submitted  in  writing  to  the  merchants  for  their  criticism,  is 
the  equalization  of  appraisements  at  the  different  ports.  The 
Committee  recommend  that  a  system  be  perfected  whereby  ap- 
praisements at  the  different  ports  may  be  equalized,  so  that  like 
goods  shall  pay  like  duties  at  all  Custom  Houses. 

There  are  over  one  hundred  Custom  Houses  in  the  Uni- 
ted States,  where  duties  are  receivable.  The  inequality  of  ap- 
praisements growing  out  of  so  many  collection  districts,  espe- 
cially under  our  complex  and  intricate  tariff,  are  numerous,  and 
are  a  most  serious  injury  to  trade. 

I  have  recently  had  a  case  in  my  own  practice,  where  one  of 
our  leading  importers  introduced  a  certain  kind  of  goods,  through 
the  New  York  Custom  House,  at  a  certain  dutiable  value,  while 
his  competitor  and  near  neighbor  imported  similar  goods,  through 
another  Custom  House,  on  a  dutiable  value  of  less  than  one  half 
of  the  value  assessed  at  the  Xew  York  Custom  House.  These 
goods  were  subject  to  mixed  duties.  The  dutiable  value  was  fixed 
by  the  New  York  Custom  House  at  sixty  per  centum,  while  the 
dutiable  value  at  the  other  port  was  fixed  at  fifty  per  centum.  It 
thus  happened  that  similar  goods  were  sold  by  two  neighboring  im- 
porters in  this  city,  the  duties  on  which  in  the  case  of  one  im- 
porter were  more  than  double  the  duties  in  the  case  of  the  other 
importer.  Owing  to  the  inability  of  the  importer  paying  the 
higher  rates  of  duty  to  compete  with  his  rival,  the  firm  found 
itself  at  the  end  of  the  season  with  a  large  stock  of  goods  on 
hand,  while,  as  a  matter  of  fact,  the  rival  had  sold  his  entire 
stock. 

Another  importer  complains  to  the  Committee  that  the  duties 
assessed  on  a  certain  class  of  goods,  imported  through  an  interior 
Custom  House,  are  just  one  half  the  duties  on  the  same  goods  im- 


u 

ported  through  the  New  York  Custom  House  ;  iu  consequence  of 
this  difference,  his  sales  in  a  particular  localit  y  are  entirely  cut  off. 

Another  importer  states  that  a  certain  importation,  introduced 
through  an  interior  Custom  House,  was  entered  as  subject  to  a 
certain  rate  of  duty,  but  that  the  appraiser  reduced  the  rate  of  duty 
one  third,  stating  to  the  importer  that  he  was  in  error  in  assessing 
himself  at  the  higher  rate  of  duty.  Similar  goods  imported  through 
the  New  York  Custom  House,  have  always  paid,  and  still  pay,  the 
higher  rate  of  duty. 

These  illustrations  can  be  multiplied  almost  indefinitely,  and  I 
have  no  hesitation  in  saying  thai  every  kind  of  business  in  the 
city  can  furnish  instances  similar  to  those  T  have  given.  Moreover, 
it  is  fair  to  assume  that  for  every  such  case  that  comes  to  light, 
there  are  a  large  number  which  are  never  known. 

These  inequalities  at  different  ports  do  not  necessarily  imply 
fraud  and  inefficiency.  The  tariff  is  so  complex  that  there  is  often 
room  for  honest  doubt  as  to  what  duties  should  be  assessed  ; 
moreover,  the  practical  and  inherent  difficulties  of  classifying  mer- 
chandise present  questions  upon  which  two  honest  and  skilled 
appraisers  at  the  same  port  frequently  differ. 

It  is  most  probable  that  correct  duties  are  assessed  at  that 
port  where  the  importations  are  largest,  and  where  there  is 
the  best  organized  corps  of  appraisers  ;  and  it  is  also  prob- 
able that  at  the  ports  where  the  importations  are  small,  and 
where  there  may  be  but  a  single  appraiser  for  all  kinds  of 
goods,  correct  duties  are  not  assessed.  The  skill  and  experi- 
ence acquired  at  this  port,  where  a  large  preponderance  of 
the  entire  duties  of  the  country  is  collected,  should  be  felt 
through  the  smaller  ports.  What  the  merchants  demand,  and 
what  the  Committee  recommend,  is  an  adequate  system  to  correct 
these  evils  and  to  equalize  appraisement  at  different  ports  ;  a 
system  that  shall  be  at  once  simple,  thorough,  and  rapid,  speed 
in  rectifying  evils  of  this  kind  being  especially  important. 

This  subject  has  received  full  discussion  in  the  letters  received 
by  the  Committee  from  importers,  and  the  latter  unite  unanimously 
in  recommending  such  a  system  as  we  have  proposed. 

This  last  recommendation  completes  the  entire  number  of  pro- 
posed changes  which  have  been  submitted  by  the  Committee  to 
the  importers  for  their  criticism.  Since  these  twenty-three  proposed 
changes  wei;e  submitted,  the  Committee  have  agreed  upon  recom- 
mending certain  others,  but,  from  want  of  time,  they  have  not 
been  able  to  ascertain  the  general  sentiment  of  the  importing 


25 

community,  by  means  of  letters  or  otherwise,  in  regard  to  them. 
I  am,  however,  directed  to  lay  before  you  these  additional  sug- 
gestions, and  to  state  that,  in  the  opinion  of  the  Committee,  these 
changes  would  be  approved  by  all  importers  if  submitted  to  them. 

XXIV.  The  Abolition  of  the  Fee  of  Ten  Dollars  on  Reappraise- 

ments. 

The  Committee  suggest  that  the  present  local  custom,  whenever  a 
reappraisement  is  claimed,  of  charging  a  fee  of  ten  dollars  to  the 
party  taking  the  appeal,  shall  be  abolished.  This  custom  seems 
to  be  peculiar  to  the  New  York  Custom  House.  The  only  pro- 
vision of  the  law  on  the  matter  is  found  in  section  2725  of  the 
Revised  Statutes,  which  is  enlarged  upon  in  article  429  of  the 
Treasury  Regulations.  Under  this  law,  the  Merchant  Appraiser  is 
entitled  to  a  compensation  of  five  dollars  per  diem  while  actually 
employed.  The  custom  has  grown  up  in  this  city  of  exacting  a 
fee  of  ten  dollars  in  advance  of  reappraisement  and  at  the  time 
the  reappraisement  is  claimed,  without  reference  to  whether  the 
Merchant  Appraiser  is  actually  employed  or  not.  The  Committee 
regard  this  fee  as  an  extortion. 

XXV.  Let  Reappraised  Goods  be  Bonded. 

The  Committee  further  recommend  that  when  an  invoice  is 
advanced  by  the  Appraiser,  and  a  reappraisement  is  claimed  by 
the  importer,  he  should  be  allowed  to  take  his  goods  upon  execut- 
ing a  bond,  and  upon  furnishing  satisfactory  samples  of  the  con- 
tents of  the  packages  to  the  appraiser. 

The  enormous  power  of  an  appraiser  to  order  in  goods,  and  to  de- 
tain them,  should  be  restricted.  The  most  irreparable  injury  is 
done  to  commerce  under  the  exercise  of  this  power.  Under  the 
existing  laws  the  entire  shipment  is  detained  until  both  the  ap- 
praisement and  the  re-appraisement  are  completed,  and  such  deten- 
tion sometimes  covers  many  months.  A  large  number  of  importers 
complain  of  the  terrible  abuses  that  have  grown  up  under  this 
provision  of  law.  It  is  not  infrequent  that  losses  of  enor- 
mous sums  are  inflicted  upon  merchants  by  these  arbitrary  deten- 
tions. The  case  of  one  of  our  Committee,  Mr.  Thomas  Barbour, 
of  the  firm  of  Barbour  Brothers,  should  be  enough  to  utterly  con- 
demn the  present  system.  There  are  other  cases,  though  usually 
of  less  magnitude,  where,  as  in  that  of  Mr.  Barbour,  the  Appraiser 
was  shown  to  be  in  the  wrong  in  detaining  the  goods,  and  where, 


♦ 

26 

upon  the  re-appraisement,  the  original  invoice  prices  were  fully 
sustained.  There  is  no  reason  why,  when  goods  are  to  be  re- 
appraised, a  satisfactory  bond  should  not  be  taken  to  take  the 
place  of  the  goods,  and  why  the  goods  should  not  then  be  surren- 
dered to  the  merchant. 

XXVI.  Increased  Despatch  in  reappraising  Merchandise. 

Complaints  are  made  on  every  hand  of  delay  in  reappraising 
merchandise.  Under  the  present  law,  which  requires  the  govern- 
ment to  detain  the  entire  invoice  subject  to  reappraisement,  the 
process  of  reappraisement  should  be  concluded  with  the  utmost 
despatch. 

This  is  a  question  of  administration,  and  is  particularly  recom- 
mended to  the  consideration  of  this  Commission. 

XXVII.  No  Duty  shoidd  be  charged  on  Goods  stolen  or  otherwise 

lost  while  in  Bo?ided  Warehouse. 

The  present  law  for  the  abatement  or  refund  of  duties  on  goods 
injured  or  destroyed  while  in  bonded  warehouse  is  contained  in 
Section  2984  of  the  Revised  Statutes.  The  relief  contained  in 
that  law  is  limited,  however,  to  such  injury  or  destruction  as  may 
occur  by  means  of  accidental  fire  or  other  casualty.  Under 
existing  laws,  merchandise  which  may  be  stolen  or  lost  while  in 
bonded  warehouse,  is  still  subject  to  duty.  One  of  our  leading 
importers  was  recently  obliged  to  pay  duties  to  the  amount  of 
nearly  twenty  thousand  dollars  on  goods  stolen  from  bonded 
warehouse.  This  is  a  hardship  that  should  be  corrected.  The 
Committee  recommend  that  the  existing  law  should  be  so  changed, 
that,  under  proper  restrictions,  merchandise  either  stolen  or  lost 
while  in  bond,  shall  be  relieved  from  duty. 

XXVIII.  Goods  procured  otherwise  than  by  Purchase  should  be 
invoiced  at  actual  Market  Value  at  Period  of  Exportation. 

The  existing  system  of  invoices  and  entries  divides  imported 
merchandise  into  two  classes — first,  purchased  goods,  and,  second, 
consigned  goods.  This  classification  pervades  all  the  laws,  regu- 
lations, and  forms  for  making  out  invoices,  together  with  the 
declarations  to  invoices,  the  consular  certificates,  and  the  oaths  on 
entries. 

When  the  owner  of  imported  merchandise  has  acquired  his 


27 


goods  by  actual  purchase — that  is,  in  the  ordinary  mode  of  bar- 
gain and  sale,  he  is  called,  in  the  parlance  of  customs  officials,  the 
ii  purchaser,"  and  his  property  is  called  "  purchased  goods."  When 
the  owner  of  imported  merchandise  has  acquired  the  same  not  by 
purchase — that  is  to  say,  not  in  the  ordinary  mode  of  bargain  and 
sale — or  when  he  has  himself  manufactured  the  goods,  and  is  still 
the  owner  of  the  same,  in  whole  or  in  part,  he  is  called  the  "  man- 
ufacturer," and  his  merchandise  is  called  "  manufactured  goods," 
or  "  consigned  goods." 

It  is  impossible  to  understand  the  laws  and  forms  for  oaths  and 
entries,  without  thoroughly  understanding  the  theory  of  this  clas- 
sification. It  was  inaugurated  by  the  Act  of  April  20th,  1818,  and 
was  afterwards  more  fully  developed  by  the  Act  of  March  1st,  1823. 

The  earliest  and,  in  my  judgment,  the  best  statement  of  the 
reasons  for  establishing  the  system  is  to  be  found  in  the  report  of 
Secretary  Crawford,  dated  January  17th,  1818,  American  State 
Papers,  Finance,  vol.  3. 

In  my  discussion  of  the  eleventh  recommendation  of  the  Com- 
mittee— that  the  dutiable  value  of  purchased  goods  should  always 
be  the  market  value  at  the  period  of  exportation — I  pointed  out 
this  provision  of  law,  to  wit,  that  goods  are  assessed,  and  should  be 
entered,  not  at  invoice  or  cost  price,  but  at  market  value  at  time  of 
shipment,  provided  such  invoice  or  cost  price  is  less  than  such 
market  value.  A  similar  provision  of  law  exists  with  regard  to 
manufactured  or  consigned  goods.  The  law  requires  an  invoice  for 
such  goods  to  be  made  out  and  to  be  verified,  although  the  goods 
have  not  been  purchased,  and  although,  because  the  goods  have 
not  been  acquired  by  purchase,  it  is  difficult  to  fix  upon  an  invoice 
price.  The  Act  of  March  1st,  1823,  re-enacted  in  section  2845  of 
the  Revised  Statutes,  and  the  Act  of  March  3d,  1863,  re-enacted  in 
section  2854  of  the  Revised  Statutes,  direct  what  shall  be  such 
invoice  price.  The  provision  of  those  sections  is  this  :  that  mer- 
chandise obtained  in  any  other  manner  than  by  purchase  shall  be 
invoiced  at  the  actual  market  value  thereof,  at  the  time  and  place 
when  and  where  the  same  is  procured  and  manufactured.  It  will 
therefore  be  observed  that  an  invoice  of  goods  acquired  other- 
wise than  by  purchase,  must  contain  these  two  things — first, 
market  value  at  the  time,  and,  second,  market  value  at  the  place, 
of  procurement  of  manufacture.  These  two  things  are  essential 
to  an  invoice  of  manufactured  or  consigned  goods. 

Having  thus  seen  how  invoices  of  consigned  goods  are  made,  let 
us  now  inquire  how  entries  of  the  same  are  made.  I  have  already 
explained  that  entries  of  purchased  goods  must  be  made  not  neces- 


28 


aarily  at  the  cost  or  invoice  price  of  the  goods,  but  at  the  actual 
market  value  at  the  period  of  exportation,  if  the  same  is  more 
than  invoice  price.  Manufactured  or  consigned  goods  must  be 
entered  on  the  same  basis.  A  person  making  an  entry  of  such 
goods  must  enter  them  at  invoice  price  if  it  is  more  than  market 
value,  but  at  market  value  if  it  is  more  than  invoice  price  ;  and 
the  market  value  referred  to  is  the  market  value  of  the  mer- 
chandise—first, at  the  period  of  exportation  to  the  United  States, 
and,  second,  in  the  principal  markets  of  the  country  from  which 
tlic  merchandise  is  imported. 

Can  any  thing  be  more  complex  than  such  a  system  for  invoicing 
and  entering  goods  ?  Observe  that  the  law  provides  two  things 
with  reference  to  the  invoice,  namely  :  first,  the  market  value  at 
the  time  of  procurement  or  manufacture,  and,  second,  the  market 
value  at  the  place  of  such  procurement  or  manufacture  :  whereas 
the  law  provides  two  other  things,  usually  quite  different,  with 
reference  to  the  entry,  namely  :  first,  the  market  vaiue  at  the 
period  of  exportation,  and,  second,  the  market  value  at  such  period 
in  the  principal  markets  of  the  country  of  exportation. 

1  venture  the  assertion  that  not  one  invoice  in  one  hundred  is 
made  out  conformably  to  this  law.  I  have  had  a  somewhat  ex- 
tended professional  experience  in  this  branch  of  cases,  and  I  have 
never  yet  found  a  manufacturer  who  invoiced  his  goods  at  the 
market  value  at  the  date  of  production,  provided  the  date  of 
production  and  the  date  of  shipment  are  not  identical;  nor 
have  I  ever  found  a  manufacturer  who  knew  that  the  law 
required  them  s<»  to  he  invoiced.  It  is  true  that  the  dec- 
laration provided  for  by  section  2854'  of  the  Revised  Stat- 
utes, recites  the  provisions  of  law  in  this  regard,  and  it  may 
be  said  the  consignor  has  only  to  read  that  declaration  to 
know  how  to  make  out  a  correct  invoice.  The  answer  to  that  is 
this  :  that  declarations  are  notoriously  incorrect  in  phraseology, 
touching  their  conformity  to  the  requirements  of  law  ;  that 
consuls  themselves,  before  whom  the  declarations  are  taken,  are 
notoriously  ignorant  of  the  relation  of  a  declaration  to  the  system 
of  invoices  and  entries,  as  well  as  of  the  general  provisions  of  law 
providing  for  the  same,  and  often  either  insist,  through  ignorance, 
on  the  wrong  form  of  declaration  being  taken,  or  make  light  of 
all  declarations,  telling  declarants  that  the  phraseology  of  the 
declaration  is  of  no  consequence  ;  and  that  the  making  of  a  de- 
claration, like  the  taking  of  an  oath  on  an  entry,  has  grown  to  be 
an  utterly  meaningless  and  empty  form. 

I  have  recently  had  a  case  in  my  own  office,  wherein  it  appeared 


* 


29 


that  an  old  and  highly-respected  consul  at  one  of  the  European 
ports,  had  compelled  my  client  to  make  false  declarations,  such  as 
were  not  according  to  the  facts,  notwithstanding  a  written  protest 
filed  with  the  consul,  and  notwithstanding  the  fact  that  the 
taking  of  the  false  declaration  worked  a  technical  forfeiture 
of  every  invoice.  In  justification  of  my  client,  I  took  the  depo- 
sition of  the  consul,  wherein  lie  stated  that  he  had  supposed  that 
the  declaration  he  had  insisted  upon  was  the  proper  one  under  the 
law,  that  he  had  always  required  from  every  body  the  same  form 
of  declaration  upon  like  facts,  and  that  his  interpretation  of  the 
law  prevailed  at  all  consulates  in  the  part  of  Europe  where  his 
consulate  was  located. 

The  facts  with  reference  to  the  matter  now  under  discussion  are 
these  :  that  when  goods  procured  otherwise  than  by  purchase  are 
not  shipped  to  the  United  States  until  some  lapse  after  manufac- 
ture, it  is,  as  a  practical  question,  often  impossible  to  ascertain 
market  value  at  the  remote  date  of  manufacture" ;  that  this  is 
especially  true  of  goods  not  originally  intended  for  the  United 
States,  and  with  reference  to  which,  therefore,  no  record  of  market 
value  may  have  been  kept  ;  that  actually  it  is  the  common  custom 
to  invoice  this  class  of  goods  at  market  value  at  date  of  shipment, 
and  not,  as  the  law  requires,  at  date  of  manufacture  or  procure- 
ment ;  and  that,  inasmuch  as  this  existing  custom  is  more  natural, 
simple,  and  equitable  than  the  existing  law,  the  law  should  be 
changed  to  suit  the  custom,  rather  than  attempt  to  make  the  cus- 
tom suit  the  law. 

The  Committee  therefore  recommend' that  existing  laws  be  so 
changed  that  goods  procured  otherwise  than  by  purchase  shall  be 
invoiced  at  market  value  at  date  of  shipment.  Should  this  change 
be  made,  the  invoice  price  and  the  dutiable  value  will  be  identical. 

XXIJZ.  Greater  Prudence  should  be  exercised  in  disturbing  Hates 
of  Duty  when  once  fixed  by  the  Treasury  Department. 

Questions  of  statutory  construction  often  arise  touching  the 
rates  of  duty  payable  on  particular  kinds  of  merchandise.  These 
questions,  arising  usually  from  obscure  or  ambiguous  phraseology 
in  the  statutes,  are  ultimately  decided  by  the  Treasury  Department 
at  Washington,  and  it  often  happens  that  the  officials  of  the 
Treasury  Department  change  their  minds  regarding  their  own  de- 
cisions. 

When  these  decisions  are  made,  they  are  enforced  immediately, 
and  the  merchant  who  has  possibly  contracted  for  large  sales,  the 


30 

price  being  based  upon  a  certain  rate  of  duty,  finds  himself  obliged 
to  pay  an  increased  rate  of  duty,  owing  to  a  sudden  and  unex- 
pected change  of  decision.  The  losses  to  merchants  that  have 
been  occasioned  by  such  vacillations  on  the  part  of  the  Treasury 
Department  are  enormous.  I  know  of  a  single  instance  where 
more  than  fifty  thousand  dollars  were  lost  by  one  firm  in  this  city, 
on  one  contract,  the  loss  having  been  occasioned  by  a  change  of 
opinion  on  the  part  of  the  Department,  as  to  the  rate  of  duty,  after 
it  had  once  formally  fixed  and  announced  the  proper  rate.  No 
less  than  four  different  decisions,  I  am  credibly  informed,  have 
been  made  at  Washington  in  one  season  on  one  kind  of  goods. 

The  Committee  suggest  that  greater  prudence  be  exercised  in 
disturbing  rates  of  duty  after  they  have  been  once  fixed  on  appeal 
to  the  Treasury  Department.  Where  the  Department  finds  itself 
in  error,  and  in  consequence  feels  obliged  to  change  the  rate  of 
duty,  such  proposed  increase  should  be  widely  published,  and 
should  not  go  into  effect  until  a  sufficient  time  has  elapsed  to 
enable  importers  to  adjust  themselves  to  the  change. 

Our  Committee  further  suggest,  that  where  doubt  exists  touch- 
ing rates  of  duty,  the  benefit  of  the  doubt  should,  as  a  rule,  be 
given  to  the  importer.  Duties  should  never  be  imposed  upon 
doubtful  interpretations.  If  he  who  could,  and  ought  to  have  ex- 
plained himself  clearly  and  fully,  has  not  done  so,  it  is  the  worse 
for  him.    This  is  a  maxim  as  old  as  Roman  law. 

I  have  now  laid  before  the  Commission  all  the  suggestions  and 
all  the  proposed  changes  that  our  Committee  have  at  present  to 
offer. 

Most  of  our  recommendations  are  matters  of  statutory  law,  and 
will  therefore  require  the  attention  of  Congress.  Some  of  them 
are  questions  of  administration,  and  can  be  dealt  with  by  the 
Executive.  We  respectfully  and  sincerely  urge  that  all  of  our 
recommendations,  both  those  that  relate  to  the  Statutes  and 
those  that  relate  to  the  Treasury  Regulations,  may  have  your  care- 
ful consideration  and  your  most  earnest  support. 


31 


ADDRESS  OF  MR.   DAXIEL  C.  ROBBIXS. 

Gentlemen  :  I  shall  address  you  to-day  with  special  reference 
to  the  proposed  reforms  in  the  customs  service  which  have  been 
presented  by  my  predecessor,  Mr.  Eaton,  as  counsel  for  the  Com- 
mittee of  the  Chamber  of  Commerce  on  Revenue  Reform,  present- 
ing in  contrast  the  customs  regulations  of  Europe  with  those  of  our 
country,  that  you  may  realize  how  moderate  are  all  the  reforms 
we  seek. 

Revenue  Reform. 

Reform  in  the  application  of  taxes  as  customs  duties  has  been 
much  considered  in  our  country,  but  reform  in  customs  regula- 
tions, to  promote  economy  in  the  collection  of  customs,  and  to 
facilitate  the  transaction  of  mercantile  business,  has  received  as 
yet  but  little  attention. 

Customs  regulations  are  so  closely  connected  with  the  subject 
of  the  tariff  that  the  general  understanding  has  been  that  ques- 
tions pertaining  to  taxation  must  be  settled  first,  as  more  impor- 
tant ;  and  whenever  improvements  have  been  sought,  they  have 
been  deferred  by  a  general  impression  that  the  conditions,  which 
pertain  to  this  subject  are  very  different  with  us  from  those  which 
exist  elsewhere.  Our  revenue  requirements  are  supposed  to  be 
greater  than  those  of  most  countries,  and,  on  account  of  the  fact 
that  the  cost  of  labor  is  usually  higher  with  us  than  in  Europe, 
high  protective  duties  are  required;  and,  as  high  duties  are  incen- 
tives to  fraud,  it  is  believed  that  regulations  which  have  proved 
quite  sufficient  for  other  countries  are  quite  inadequate  for  us. 

As  a  prominent  example,  take  the  subject  of  specific  duties  : 

Specific  duties  have  so  taken  the  place  of  ad  valorem  rates  in 
Europe  that  they  may  be  said  to  be  universal.  The  few  ad- 
valorems  which  do  exist  in  the  principal  European  tariffs  remain 
apparently  only  as  oversights  or  neglects,  because  ad  valorem  cal- 
culations must  precede  the  imposition  of  specific  rates  ;  and  yet 
when  a  prominent  customs  official  was  recently  asked  if  he  be- 
lieved the  application  of  specific  duties  upon  all  goods  to  be  pos- 
sible, he  gave,  in  accordance  with  the  general  impression,  a  nega- 
tive answer — a  surprising  reply  when  we  consider  that  all  past 
experience  is  in  favor  of  specific  rates.  Our  largest  importers, 
who  are  familiar  with  the  most  complicated  manufactures,  declare 
this  matter  to  be  the  principal  necessity  in  all  tariff  reform,  with- 


32 


out  which,  to  use  the  language  of  many  of  our  largest  and  most 
intelligent  importers,  all  efforts  for  the  promotion  of  revenue  re- 
form will  prove  to  be  wasted  efforts,  because  it  is  the  general  con- 
viction, that,  notwithstanding  all  the  vigilance  of  Customs 
officials,  not  much  over  60  per  cent  of  the  dues  which  belong  to 
the  government  from  ad  valorem  goods  are  collected,  and  that, 
unless  a  change  is  made  from  ad  valorem  to  specific  rates,  all 
respectable  importers  will  be  obliged  to  discontinue  business  ; 
that  we  shall  have,  in  time,  in  the  respectable  business  of  the 
importer, — a  pursuit  involving  the  employment  of  large  capital 
and  much  intelligence,  with  attendant  character — the  same  national 
experience,  that  we  have  had  in  the  attempt  to  collect  excessive 
duties  on  spirits,  the  importation  of  foreign  merchandise,  like  the 
distillation  of  spirits,  will  pass  out  of  the  hands  of  men  of  character. 

If  specific  duties  were  universal  in  our  tariff,  as  in  the  British 
list,  which  comprises  only  forty  enumerations  of  articles  and  varie- 
ties of  articles  ;  or,  if  they  were  almost  universal,  as  in  most  of 
the  European  tariffs  ;  or,  even  general,  as  in  France,  whose  cus- 
toms list  is  much  more  complicated  than  any,  because  it  is  through- 
out studiously  protective  and  includes  more  differential  rates  than 
any  other  tariff  in  existence, — the  collection  of  customs  would  be 
much  simplified,  and  most  of  the  checks  and  safeguards,  which 
are  now  deemed  necessary,  although  they  involve  expense  and 
hindrance  in  the  transaction  of  business,  could  be  dispensed  with. 

Customs  regulations  in  Great  Britain  are  formal  like  our  own,  but, 
as  compared  with  ours,  are  very  liberal  in  their  requirements  ;  and 
the  British  list  of  duties,  which  are  all  specific,  is  the  most  simple 
of  all.  The  French  tariff  list  is  very  complicated,  but  customs 
regulations  in  France  are  very  simple.  All  that  is  required  at  the 
hands  of  the  importer  is  to  furnish  the  government  with  a  descrip- 
tive list  of  the  goods  imported  and  proof  of  ownership,  which  the 
government  receives  and  takes  upon  itself  the  examination  of  the 
goods  and  the  making  out  of  a  bill  of  duties,  which  the  importer 
pays  and  receives  an  order  for  his  merchandise.  Neither  invoices 
nor  bills  of  lading  are  indispensable,  nor  are  oaths  or  bonds  re- 
quired ;  and  there  are  no  fees  or  charges,  except  in  the  use  of 
stamped  paper,  costing  two  sous  per  sheet. 

Custom- House  Entries  in  Great  Britain. 

In  Great  Britain  all  that  is  required  is  to  submit  a  formal  entry, 
as  prescribed  by  law,  which  must  contain  the  particulars  corre- 
sponding with  the  description  of  the  goods  and  packages  given  in 


33 


the  report  of  the  ship,  with  a  memorandum  of  the  duties  which 
may  be  payable  upon  the  goods  mentioned  in  such  entry,  which, 
when  paid,  is  to  be  signed  by  the  Collector  or  his  deputy,  and 
transmitted  to  the  proper  authority,  who  will  deliver  the  goods. 
Neither  invoices  nor  bills  of  lading  are  essential,  but  these,  with 
other  papers,  can  be  demanded  by  the  government,  if  fraud  is  sus- 
pected. Customs  fees  are  numerous,  as  with  us,  but  the  charge 
for  these  is  moderate.  Neither  bonds  nor  oaths  are  required  ;  but 
when  goods  are  incorrectly  described  to  the  prejudice  of  the 
crown,  they  are  forfeited  with  a  penalty  of  £100. 

Warehousing  Entries  in  Great  Britain. 

When  goods  are  intended  to  be  warehoused,  without  payment 
of  duty  on  the  first  entry  thereof,  the  importer  or  his  agent  has 
to  deliver  to  the  Collector  a  bill  of  entry  of  such  goods,  contain- 
ing the  same  particulars  as  before  described,  together  with  the 
name  and  description  of  the  warehouse  and  of  the  person  in  whose 
name  the  goods  are  to  be  warehoused  ;  and  this  entry,  when 
signed  by  the  proper  officer,  is  the  warrant  for  landing  and  ware- 
housing the  goods,  after  which  the  same  or  any  part  thereof  may, 
upon  further  entry,  be  delivered  for  home  use  or  for  exportation, 
as  may  be  desired. 

Landing  Regulations  in  Great  Britain. 

All  goods  must  be  landed  within  fourteen  days,  exclusive  of  holi- 
days and  Sundays.  Goods  may  be  conveyed  to  the  Queen's  ware- 
house, to  remain  there  for  the  remainder  of  the  fourteen  days 
allowed  after  arrival  of  ship  under  charge  for  removal,  or  they 
may  remain  in  warehouse  three  clear  days  free  from  rent,  to 
afford  parties  a  sufficient  time  to  examine  and  clear  the  same. 

Export  Bonds  in  Great  Britain. 

Bonds  are  given,  when  warehoused  goods  are  exported,  for  double 
the  amount  of  duty,  with  one  surety,  as  with  us,  that  such  goods 
shall  be  duly  shipped,  exported,  and  landed  at  the  place  for 
which  they  are  entered  outwards,  or  otherwise  and  satisfactorily 
accounted  for,  such  bond  note,  when  duly  signed,  being  the 
export  entry  for  such  goods. 


34 

Customs  Regulations  in  Great  Britain  and  in  the  United  States 

compared. 

Customs  regulations,  as  they  exist  in  Great  Britain  and  in  our 
United  States,  have  much  resemblance  in  form,  but  they  are  quite 
dissimilar  in  penalties  and  requirements.  In  entering  goods  in  Great 
Britain,  there  is  no  demand  for  importer's  invoice  unless  fraud  is 
suspected.  Oaths  are  not  required,  and  no  bonds  are  given,  as  with 
us,  for  double  the  amount  of  the  invoice,  in  two  separate  sureties 
each.  In  exporting  warehoused  goods,  a  bond  is  given  with  a  single 
surety  for  double  the  amount  of  duties,  as  with  us,  but  the  re- 
quirements in  regard  to  landing  certificates  are  very  liberal,  and 
do  not  involve  the  expense  of  consular  supervision  or  any  special 
act  on  the  part  of  the  master  or  the  mate  of  the  vessel,  or  the 
consignee,  the  language  of  the  British  act  being  discretionary,  as, 
"  The  goods  shall  be  landed  and  the  export  shall  be  satisfactorily 
accounted  for." 

Expense  of  Collection  of  Customs. 

The  expense  of  collecting  the  customs  in  1875,  according  to 
figures  furnished  by  the  statistical  department  at  Washington, 
was  4^-  per  cent.  The  total  revenue  from  customs  was  $157,167,- 
722.35,  and  the  expense  of  collecting  was  $7,028,521.80 — an  ex- 
traordinary amount,  when  we  consider  that  no  capital  is  involved 
or  charge  for  rent  or  insurance  on  stock  or  other  important 
outgoes  which  pertain  to  mercantile  transactions. 

The  expense  of  collecting  the  customs  in  Great  Britain  in  1874 
was  £1,022,534,  or  about  five  millions  of  dollars  ;  but  Great 
Britain  imported,  in  1874,  1819  millions,  and  she  exported  1524 
millions.  Our  imports  in  1874  were  642  millions,  and  our  exports 
were  575  millions,  or  about  one  third  those  of  Great  Britain. 
The  expense  of  collecting  customs  in  our  United  States  should  not 
exceed  two  per  cent. 

Considerable  prominence  has  been  given  recently  to  the  fact  that 
the  percentage  of  expense  on  the  collection  of  customs  is  less  in  the 
United  States  than  in  Great  Britain,  but  it  should  be  borne  in 
mind  that,  when  a  nation  undertakes  the  collection  of  customs  from 
imports,  it  must  take  cognizance  of  all  imports,  and  hence  the 
higher  the  average  rate  of  duty  the  lower  will  be  the  average  ex- 
pense of  collections.  Now  the  average  duty  on  all  imports  in 
Great  Britain  is  less  than  six  per  cent,  while  the  average  in  our 


35 


United  States  is  about  30  per  cent,  and  it  will  be  readily  under- 
stood that  an  advance  of  this  present  average  to  50  per  cent  would 
not  increase  the  expense  of  collection  to  much  extent,  because 
very  nearly  as  much  clerical  work  is  required  for  the  present 
average,  as  would  be  required  for  the  advanced  rate.  Further, 
customs  regulations  in  Great  Britain,  as  compared  with  ours,  for 
entering  and  warehousing  and  exporting  goods  are  very  liberal. 
The  customs  service  of  Great  Britain  assists  the  merchant  in 
every  way  it  can,  while  ours  purposely  obstructs  and  hinders,  as 
will  be  explained  hereafter. 

The  British  Tariff. 

The  customs  list  of  Great  Britain  has  been  so  reduced  within 
the  past  forty  years  that  at  present  it  is  very  limited. 

All  kinds  of  sugars  were  placed  on  the  free  list  in  1874 — an  im- 
portant article  for  revenue  that  had  yielded  the  government  over 
fourteen  millions  of  dollars  annually. 

The  revenue  from  sugar  and  molasses  in  the  United  States  in 
1876  was  $41,899,559.52,  out  of  a  total  income  from  customs  of 
$145,178,602.75,  or  about  30  per  cent  of  the  total  income  from 
customs. 

The  imperial  list  of  Great  Britain  for  1876  contains  forty  enume- 
rations of  articles  and  varieties  of  articles,  of  which  fifteen  enumera- 
tions are  wholly  for  revenue  and  twenty-live  are  mainly  protective 
duties,  the  last  being  imposed  to  overcome  internal  revenue  and 
excise  regulations,  whereby  the  manufacturer  is  placed  at  a  dis- 
advantage. 

The  fifteen  revenue  enumerations  comprise  in  fact  but  ten  dis- 
tinct articles,  and  should  currants,  figs,  plums,  prunes  and  raisins 
be  classed  as  fruits,  the  revenue  may  be  properly  said  to  be  derived 
from  six  commodities. 

The  present  revenue  from  customs  in  Great  Britain  is  about  1 00 
millions  of  dollars,  from  which  it  may  be  noted  that  the  British 
Islands,  with  a  population  of  35  millions,  derive  nearly  as  much 
revenue  from  customs  on  ten  commodities  as  our  United  States, 
with  a  population  of  40  millions,  receive  from  over  2500  articles- 
excluding  sugar  and  molasses. 

Taxation  in  Great  Britain  is  applied  as  far  as  possible  to  waste 
of  all  kinds,  and  luxuries,  as  food  and,  drinks  ;  and  great  care  is 
taken  that  implements  and  machinery  shall  be  free.  The  greatest 
care  is  .taken  ii>  the,  encouragement,  of  industry  of  all  kinds, 
and  to  promote  the  permanent  investment  of  wealth;  TJiere 


36 


are  three  prominent  aims  in  the  application  of  taxes  in  Great 
Britain.  Industry  of  all  kinds  is  encouraged,  or  never  dis- 
couraged ;  waste  of  all  kinds  is  discouraged  ;  and  the  preservation 
of  wealth  is  sought  in  the  promotion  of  permanent  investments. 

The  Tariff  of  the  United  States. 

Our  present  customs  list  is  almost  entirely  the  work  of  legisla- 
tion since  1861.  Previous  to  the  war  of  the  rebellion,  the  reve- 
nue requirements  of  the  government  were  limited,  and  the  de- 
mands of  the  protection  interest  had  been  limited  by  the  celebrated 
compromise  measures  of  1832,  whereby  all  protective  duties  were 
to  be  gradually  reduced,  during  a  period  of  ten  years,  to  a  maxi- 
mum of  twenty  per  cent. 

In  1861  the  average  of  customs  on  all  imports  was  12.08  per 
cent,  from  which  date,  with  increasing  duties  through  successive 
acts,  it  reached  in  1868  a  maximum  of  44.25  per  cent  on  all  im- 
ports ;  since  which  date  (1868),  by  reductions  in  duties  and  in- 
crease in  the  list  of  free  goods,  the  average  on  imports  has  been 
reduced  to  about  29  per  cent. 

The  total  imports  in  1875  were  $547,050,117.90,  and  the  aggre- 
gate of  all  duties  was  $154,554,982.55,  or  an  average  of  40.62  per 
cent  on  dutiable  goods,  and  about  29  per  cent  on  the  total  sum 
imported. 

Our  tariff  contains  thirteen  schedules,  embracing  1505  dutiable 
articles,  which  are  either  distinctly  specified  or  included  in  general 
or  special  classifications,  to  which  must  be  added  nearly  100O 
articles  which  are  not  enumerated,  but  which,  under  the  geneual 
provisions  of  sections  2499  and  2516,  would  be  assigned  as  dutiable 
commodities,  making  in  all  over  2500  dutiable  enumerations. 

The  free  list  contains  an  enumeration  of  over  600  articles. 

Of  the  1505  articles  which  are  specified  as  dutiable,  823  pay  ad 
valorem  rates  ranging  from  10  to  75  per  cent,  541  pay  specific 
rates,  and  144  are  subject  to  compound  rates.  ■» 

Of  the  articles  comprised  under  sections  2499  and  2516,  in  num- 
ber nearly  1000,  the  proportion  of  ad  valorem,  specific  and  com- 
pound rates  cannot  be  ascertained. 

Customs  duties  in  our  tariff  are  discordant,  the  same  article  pay- 
ing different  rates  of  duty  under  different  designations,  with  much 
obscurity,  whereby  litigation  is  constantly  provoked.  Our  tariff 
list  is  frequently  spoken  of  as  a  very  complicated  one  ;  it  is  more 
properly  an  incomplete  and  obscure  and  very  badly-designed  tariff, 
while  its  list  of  duties  is  much  less  complicated  than  that  of  France- 


37 


Our  tariff  list  is  a  confused  medley,  without  any  classification 
of  articles,  except  a  sort  of  alphabetical  arrangement,  in  which  sub- 
stantive and  adjective  words  take  precedence  by  turns,  with  no 
regard  for  the  needs  of  business  or  any  general  policy  that  can  be 
discerned.  It  is  the  product  of  hasty  and  partial  legislation, 
made  in  the  interest  of  particular  individuals  or  special  industries 
from  time  to  time,  and  it  is  in  all  respects,  as  a  work  of  art,  or  as 
the  product  of  a  people,  whose  boast  has  been  their  commercial 
enterprise,  discreditable. 


We  want  a  better  revenue  system,  because  our  present  Ameri- 
can system,  or,  more  properly,  want  of  system,  is  the  worst  extant. 
It  is  the  most  expensive  of  any  ;  it  cost  the  government  last  year 
4-j-  per  cent  to  collect  the  customs,  when,  if  the  tariff  were  simplified, 
and  the  same  economy  introduced  into  public  that  is  usual  in  pri- 
vate affairs,  it  could  be  collected  for  less  than  2  per  cent  ;  worse 
than  the  Zollverein  of  Germany,  which  was  a  compromise  arrange- 
ment of  low  specific  duties  upon  almost  all  goods  within  a  limit  of 
ten  per  cent,  and  specially  adapted  to  the  condition  of  the  German 
states,  when  it  was  proposed  by  Prussia  in  1818  ;  worse  than  the 
French  tariff,  which  is  a  carefully-classified  customs  list,  and  studi- 
ously protective,  although  it  imposes  low  duties  on  raw  materials, 
and  thereby  strikes  at  the  very  root  of  the  protective  policy  ; 
worse  than  the  British  customs  list,  which  has  been  called  a  free- 
trade  tariff,  although  it  contains  more  protective  than  revenue 
duties,  it  being,  in  fact,  the  only  list  that  is  consistently  protective, 
while  it  is  sagacious  in  revenue. 

Better  customs  regulations  are  much  needed,  that  economy  in 
the  collection  of  the  revenue  may  be  promoted,  and  that  trade 
may  be  less  hindered  and  burdened  with  charges. 

Consular  certificates  are  unknown  in  European  commerce,  and 
they  are  only  required  in  a  very  few  unimportant  states,  as  : 


Necessity  of  Revenue  Reform. 


Hawaiian  Islands,  at  a  cost  of 
Mexico,  "  " 


$7  00  gold. 
4  00  " 


Nicaragua, 

Paraguay, 

Peru, 


"  %\  50  to  4  00 


2  00 
2  00 
4  00 


a 


Venezuela, 


38 


They  are  not  required  in  Brazil,  Costa  Rica,  Chili,  Ecuador, 
Guatemala,  Honduras,  Salvador,  or  elsewhere,  so  far  as  known. 

With  telegraphic  communications,  and  steam  and  rail  transpor- 
tation with  most  countries,  the  tendency  of  commerce  is  to  very- 
frequent  transactions  in  smaller  amounts,  and  hence,  besides  the 
hindrance  and  delay  in  duplicate  and  triplicate  invoices,  the  cost 
of  consular  certificates  has  become  a  much  more  important  item 
of  expense  than  formerly,  the  cost  of  consular  certificates  being 
as  follows  : 


In  Great  Britain  13s.  10d.  =  $3  39  gold. 

"  France  13  francs  =  2  60  " 

"  Germany  10.90marks  =   2  62  " 

"  Austria  155.  6(1  =   3  80  " 

"  Turkey  1 4s.  =   3  43  " 


Our  customs  regulations  should  be  completely  reformed,  like 
those  of  France,  or  they  should  be  modified,  like  those  of  Great 
Britain,  to  meet  the  requirements  of  the  times,  which  are  very 
different  from  those  of  1789,  when  the  first  tariff  was  instituted. 

Our  customs  regulations  should  be  reformed,  because  it  is  a 
remarkable  fact  that  while  those  of  other  nations  have  become 
more  and  more  liberal  to  meet  the  requirements  of  commerce, 
those  of  our  country  have  grown  more  and  more  exacting  with 
each  advance  of  duties. 

The  interests  of  commerce  in  our  country  in  connection  with 
this  subject  have  been  wholly  ignored  :  how  to  collect  the  pound 
of  flesh  appears  to  haA^e  been  the  only  thing  considered. 

When  Alexander  Hamilton  proposed  our  first  tariff  act  in  1789, 
he  suggested  a  maximum  of  ten  per  cent  on  imports,  because  he 
believed  a  higher  rate  would  prevent  imports,  and  "  strangle 
commerce,"  or  provoke  smuggling. 

That  an  average  of  over  44  per  cent  on  all  imports  could  be 
successfully  collected  in  1868  is  one  of  the  most  surprising  per- 
formances in  our  national  career. 


39 


ADDRESS  OF  MR.  THOMAS  BARBOUR. 

Gentlemen  of  the  Commission,  and  Members  of  the  Chamber 
of  Commerce  :  Many  points  which  I  should  desire  to  bring  to  your 
notice  have  been  already  covered  by  the  very  able  and  compre- 
hensive arguments  submitted  by  our  counsel,  Mr.  Eaton,  and  by 
my  respected  colleague,  Mr.  Robbins,  and  will  be  comprehensibly 
dealt  with  by  my  esteemed  friend,  Mr.  Jackson  S.  Schultz,  with 
whom  I  have  had  the  honor  of  co-operating  to  put  before  this 
honorable  Commission,  representing  the  government,  details  of  so 
much  importance  that  they  cannot  fail  to  enlist  the  attention  of  the 
entire  mercantile  community.  I  shall  endeavor  to  embody  in  my 
statement  some  questions  which  our  committee  have  been  satisfied 
to  leave  to  me  to  bring  before  you.  I  am  able  to  substantiate  by 
facts  and  figures,  and  by  the  experience  of  our  own  firm,  many 
gross  wrongs  and  outrages  which  we  have  submitted  to,  owing  to 
the  acts  of  the  government  officials,  perpetrated  under  the  protec- 
tion of  the  law  ;  and  I  am  of  the  opinion  that  a  plain  statement  of 
the  facts,  which  we  now  lay  before  your  honorable  Commission,  will 
constitute  the  strongest  argument  against  the  abuse  of  the  powers 
now  vested  in  the  appraisers'  department,  and  which  are  likely  at 
any  moment  to  be  used  against  any  importing  merchant  of  New 
York. 

I  beg  to  submit  a  detailed  statement,  showing  181  cases  of  our 
regular  thread  importations,  representing  an  invoice  value  of 
£9444  6s.  6d.  sterling,  on  wrhich  we  paid  into  the  United 
States  Treasury  the  sum  of  about  $20,000,  gold,  for  the  privilege 
of  bringing  said  property  into  our  possession. 


Memorandum  of  Linen  Threads  imported  by  Barbour  Brothers 
and  held  in  Public  Stores  pending  Beappraisement,  April,  1876. 


Marks  and 
No. 

Description. 

Steamer. 

Duties  Paid. 

Goods 
Delivered. 

D  4A  16/29 

3S  7/11 
D  4A  30/37 
38/48 
E  6A  1/2 
3/5 
6/10 
11/18 

14  cases  threads 

5  " 

8  " 
11  " 

2  " 

3  " 

5  " 
8  " 

Fgypt  

City  of  Berlin. . .. 

Celtic  

City  of  Richmond 

April  26,1876 
"     27,    "  ■ 

May  2,  " 
"  10,  " 
"  15,  " 
"  22,  " 
"     29,  " 

June  12,  " 

Sept.  28,  1876 

"    23,  " 

"    26,  " 
"    26,  " 
"    26,  " 
"    26,  " 
"    26,  " 
"    26,  " 

40 


Marks  and 
No. 


F  eA  1/6 

7/12 
13/45 
46/65 
66/89 
90/93 
G  TA  1/11 
12/32 


Description. 


6  cases  threads 

6  " 

33  " 

20  " 
24  " 

4  " 

11  " 

21  " 


Steamer. 


Duties  Paid. 


Goods 
Delivered. 


Britannic  

Abyssinia  

Germanic  

State  of  Penn.. .. 

Celtic  

Scythia  

Britannic  

State  of  Indiana. . 


July 


June  20,  1876 

29,  " 

5,  " 

"      6,  " 

"     10,  " 

"     12,  " 

"     25,  " 

Aug.    2,  " 


Sept.  26, 1876 

"  26, 

"  28, 

"  28, 

"  28, 

"  26, 

"  28, 

"  28, 


Total — 181  cases  ;  value,  £9444  65.  6d.  Duties  paid  on  above, 
$20,000,  gold. 

These  goods,  on  which  we  had  paid  duty,  were  detained  in  the 
appraisers'  department  from  April  26th,  1876,  to  September  28th 
of  the  same  year,  a  period  extending  over  five  months,  involving 
great  inconveniences  and  losses  to  our  firm,  and  a  serious  em- 
barrassment to  our  regular  business.  The  goods  were  of  the 
same  staple  description  which  has  characterized  our  importations 
for  over  a  quarter  of  a  century  ;  and  we  can  in  no  way  account  for 
the  questions  raised  by  the  appraisers,  except  by  attributing  them 
to  their  utter  ignorance  of  the  subject  at  issue.  We  need  hardly 
add  that  the  government  receded  from  every  position  in  which 
these  incompetent  officials  had  placed  it  ;  and  that  we  were  never 
called  upon,  in  the  end,  to  pay  one  cent  to  obtain  possession  of 
the  merchandise  so  long  and  so  unjustly  retained  by  the  gov- 
ernment of  the  United  States. 

I  also  present  to  you,  gentlemen,  statements  and  letters  from 
merchants  of  the  highest  standing  in  this  community, — merchants 
who  have  been  in  business  for  over  half  a  century,  whose  names 
and  reputation  are  dearer  and  more  sacred  to  them  than  any  mere 
question  of  dollars  and  cents. 

I  have  one  statement  here  which  shows  where  279  cases  of  !im- 
ported  goods,  belonging  to  one  firm,  were  detained  and  ordered 
into  the  custody  of  the  United  States  for  examination,  and  kept 
back  for  months,  involving  an  actual  outlay  of  $611.12  for 
storage,  labor,  etc.;  and  also  a  statement  of  72  cases  imported  by 
the  same  firm.  On  both  of  these  transactions  the  government 
insisted,  after  great  and  vexatious  delays,  on  collecting  the  paltry 
sum  of  $6.63.  The  direct  loss  to  the  importer,  from  the  delay 
and  detention  of  such  a  large  amount  of  goods,  can  only  be 
calculated  by  thousands  of  dollars  ;  not  taking  into  consideration 
the  feelings  of  an  honorable  firm,  bearing  a  name  of  unques- 
tioned integrity  in  this  community,  when  charged  with  fraud. 


41 


I  will,  with  your  kind  permission,  read  to  you  a  letter  addressed 
to  me,  which  may  further  enlighten  your  honorable  Commis- 
sion in  regard  to  facts  which  I  bring  before  you  prominently. 
This  letter  represents  numbers  of  others  in  my  possession  which 
your  time  will  not  permit  me  to  more  than  allude  to. 

"  New  York,  April  30, 1877. 

"  Thomas  Barbour,  Esq. 

"  Dear  Sir  :  In  reply  to  your  request  to  name  such  just  griev- 
ances in  Custom-House  administration  as  have  come  under  our 
observation,  we  beg  to  say  that  we  consider  the  powers  with 
which  the  Collector  is  clothed  under  section  2899  of  the  Revised 
Tariff,  and  which  in  practice  are  exercised  by  the  assistant  appraiser, 
oppressive,  arbitrary,  and  dangerous  when  exercised  by  an  incom- 
petent assistant  appraiser  ;  and  we  believe  that  the  checks  upon  an 
incompetent  or  corrupt  official  of  this  grade  are  not  adequate  to 
prevent  gross  wrongs  upon  merchants. 

"We  submit  that  it  would  not  be  impossible  to  so  jealously 
guard,  by  law,  the  powers  granted  by  this  section,  as  to  secure  the 
revenue  and  yet  protect  the  rights  of  citizens. 

"  The  assistant  appraisers  exercise  the  power  of  calling  into  store 
within  ten  days  after  an  appraisement,  all  the  goods  of  any  invoice. 
This  is  a  necessary  power  to  which  no  merchant  could  object,  if 
limited  to  the  time  when  the  goods  are  under  appraisement, 
and  if  the  time  allowed  for  appraisement  were  limited  by  law  to 
a  fixed  period.  But  the  appraisers  can  delay  appraisement  at 
their  pleasure  or  caprice,  so  that  they  have  power  over  all  a  mer- 
chant's importations  for  such  time  as  they  please. 

"  We  trust  that  your  committee  will  suggest  that  the  appraisers 
be  compelled  by  law  to  pass  upon  invoices  within  ten  days  ;  and 
that,  when  a  merchant's  bond  is  good,  some  check  should  be  put 
upon  their  power  to  harass  him  by  ordering  large  blocks  of  mer- 
chandise to  the  public  stores  after  that  time  ;  and  especially 
where  the  assistant  appraisers  know  that  they  have  gone  direct 
from  the  ship's  wharf,  in  the  regular  course  of  business,  to  other 
cities  for  consumption. 

"We  do  not  doubt  that  your  attention  will  also  be  given  to  the 
unfairness  of  a  rule  which  makes  the  liquidation  of  an  entry  a 
final  settlement  as  against  the  government,  but  not  as  against  the 
merchant. 

"  As  surviving  partners  of  the  firm  of  John  &  Hugh  Auchincloss, 
we  have  had  some  experience  of  the  trouble  and  expense  which 
follow  the  arbitrary  exercise  of  the  powers  and  rules  above  cited, 


42 


testimony  concerning  which  will  be  given  before  the  Committee 
on  Tariff  Reform,  if  we  are  invited  to  attend. 

"  Yours  respectfully, 

"  Auchixcloss  Brothers." 

I  greatly  regret  that  the  time  and  opportunity  afforded  me  are 
insufficient  to  present  the  facts  known  to  me,  representing  numer- 
ous wrongs  which  many  of  my  importing  friends  have  submitted 
to.  And  I  would  here  state  that  it  is  simply,  in  my  opinion,  a 
sense  of  fear  entertained  by  the  importing  merchants,  which  pre- 
vents them  from  coming  forward  and  stating  the  many  indigni- 
ties and  outrages  which  they  have  patiently  borne  at  the  hands 
of  these  irresponsible  United  States  officials,  for  the  last  ten  years. 

I  have  documents,  too  voluminous  to  embody  in  the  statement 
which  I  am  now  permitted  to  make,  showing  the  wilful  and 
malicious  delays  to  our  regular  business,  extending  over  a  long 
period  of  time.  In  no  instance  did  we  fail  to  establish  the  entire 
correctness  of  our  invoices  as  presented  to  the  government  of  the 
United  States,  and  on  which  we  paid  the  legal  duties. 

At  the  present  time  we  are  relieved  from  the  unpleasant 
delays  and  annoyances  of  the  past.  We  might  perhaps  better 
illustrate  to  what  extent  we  were  annoyed,  by  reading,  with  your 
kind  permission,  a  letter  addressed  to  an  assistant  appraiser  of  the 
Fourth  Division,  Port  of  New  York,  which  will  explain  partially 
to  what  extent  our  business  was  stopped.  The  letter  is  as 
follows  : 

"New  York,  134  Church  street,/ 
November  1,  1876.  f 

"  Mr.  William  Day,  Assistant  Appraiser,  Fourth  Division,  Port 
of  New  York. 

"  Sir  :  It  has  come  to  our  knowledge  that  you  have  overstepped 
your  duty,  in  our  opinion,  in  still  further  endeavoring  to  delay  our 
shipments  of  linen  threads  to  this  port  against  some  half  a  dozen 
decisions  in  our  favor  heretofore  given  on  the  same  point.  Should 
you  further  go  out  of  your  line  of  duty  to  the  United  States  Gov- 
ernment, we  shall  take  active  measures  to  enlighten  you  on  your 
business  as  an  appraiser,  towards  us  as  importers  of  linen  thread, 
and  we  do  not  think  we  shall  appeal  to  the  Secretary  of  the  Treas- 
ury in  vain. 

"  Yours  respectfully, 

"  Barbour  Brothers." 


43 


To  this  letter  Mr.  Day  had  not  the  courtesy  to  honor  us  with  a 
reply. 

I  will  say  that  in  the  development  by  my  firm  of  our  new  flax- 
thread  industry  in  the  city  of  Paterson,  employing,  as  we  do,  a 
large  number  of  work-people,  and  involving  a  very  large  outlay 
of  capital,  we  have  had  very  serious  impediments  thrown  in  our 
way.  It  might  be  inferred  that  a  law  such  as  is  stated  in  the 
seventh  section  of  the  Act  of  Congress  of  the  8th  of  February, 
1875,  was  meant  to  provide  for  the  importation,  free  of  duty,  of 
machinery  adapted  for  the  manufacture  of  flax  fabrics,  and  that 
the  intention  of  Congress  in  passing  such  a  law,  was  to  encourage 
the  investment  of  capital  in  that  direction,  in  the  United  States. 
The  law  to  which  I  refer  is  as  follows  : 

"  All  machinery  not  now  manufactured  in  the  United  States, 
adapted  exclusively  to  manufactures  from  the  fibre  of  the  ramie, 
jute,  or  flax,  may  be  admitted  into  the  United  States  free  of  duty 
for  two  years  from  the  first  of  July,  eighteen  hundred  and 
seventy-five." 

Relying  on  the  provisions  of  this  law,  we  have  recently  brought 
over  flax  machinery  of  great  value,  intending  to  use  the  same  at 
our  new  factory  at  Paterson.  Upon  the  arrival  of  this  machinery 
we  addressed  the  following  letter  to  the  Treasury  Department  : 

"  134  Church  street,  New  York,  > 
April  19,  1877.  f 

"  To  the  Honorable  John  Sherman,  Secretary  of  the  Treasury, 
Washington,  D.  C. 
"Sir  :  By  Act  of  Congress,  8th  February,  1875  (Sec.  7),  it  is 
provided  : 

" '  That  all  machinery,  not  now  manufactured  in  the  United 
States,  adapted  exclusively  to  manufactures  from  the  fibre  of  the 
ramie,  jute,  or  flax,  may  be  admitted  into  the  United  States  free 
of  duty  for  two  years  from  the  first  day  of  July,  1875.' 

"  We  are  at  present  importing  machinery,  manufactured 
specially  for  our  new  mills  in  Paterson,  N.  J.,  and  we  respectfully 
request  that  you  will  give  such  instructions  to  the  Collector  of 
the  Port  of  New  York  as  will  enable  us  to  obtain  our  property  in 
accordance  with  law,  and  without  unnecessary  delay. 

"  We  had  the  honor  of  the  highest  awards  at  the  Centennial 
Exhibition,  and  the  additional  distinction  of  being  singled  out 
by  the  French  Commissioners  as  first  in  the  manufacture  of  linen 


44 


threads.    A  copy  of  their  report  we  take  the  liberty  of  sending 
you  by  this  mail. 

"  We  remain,  sir,  respectfully  yours, 

"  (Signed)  Barbour  Brothers." 

To  that  letter  we  received  an  answer  from  the  Treasury  Depart- 
ment, dated  April  21st,  187V.  With  your  permission  I  will  read 
the  reply. 

"Treasury  Department,  Washington,  D.  C,  ) 
April  21,  1877.  f 

"Messrs.  Barbour  Brothers,  134  Church  street,  Xew  York. 

"  Gentlemen  :  The  Department  is  in  receipt  of  your  letter  of 
the  19th  instant,  in  which  you  state  that  you  are  at  present  im- 
porting machinery  manufactured  especially  for  your  new  mills, 
in  Paterson,  X.  J.,  which  you  claim  is  free  of  duty  under  the 
Act  of  February  8th,  1875,  which  exempts  from  duty  all  machinery 
not  now  manufactured  in  the  United  States,  adapted  exclusively 
to  manufac  tures  from  the  fibre  of  the  ramie,  jute,  or  flax,  and 
you  request  the  Department  to  give  such  instructions  to  the 
Collector  of  Customs  at  New  York  as  will  enable  you  to  obtain 
this  machinery  in  accordance  with  law,  and  without  unnecessary 
delay. 

"In  reply,  you  are  informed  that  the  Collector  has  general  in- 
structions governing  importations  of  such  goods,  and  that  the 
question  whether  they  are  free  of  duty  or  not,  cannot  be  deter- 
mined until  after  examination  thereof  by  the  appraiser. 

"  It  is  presumed  that  the  Collector  will  give  all  facilities  for  as 
early  a  delivery  of  the  goods  as  is  practicable,  and  it  is  not  per- 
ceived that  any  instructions  in  the  premises  are  necessary.  Your 
application  should  therefore  be  made  to  the  Collector. 

"  Respectfully, 
"  (Signed)  H.  F.  French, 

"  Assistant  Secretary." 

This  reply  informed  us,  as  you  perceive,  that  the  Collector 
of  this  port  had  general  instructions  governing  the  importation 
of  such  machinery,  and,  pursuant  to  that  information,  I  at  once  ad- 
dressed the  following  letter,  dated  April  23d,  1877,  to  the  Col- 
lector of  the  Port  of  Xew  York  : 


45 


"  134  Church  street,  New  York  1 
April  23,  1877.  '  \ 

"  Gex.  C.  A.  Arthur,  Collector  of  the  Port,  New  York. 

(\  C&B  | 

"  Sir  :  In  the  matter  of  ten  cases  of  machinery  \\^sT/  2/4  —  3 

cases,  A  1/7  —  7  cases j  ex  SS.  Bothnia,  said  machinery  being 

adapted  exclusively  to  the  manufacture  of  flax,  we  claim  entry, 
free  of  duty,  under  Act  8th  February,  1875,  section  7. 

"  The  packages  are  large  and  heavy,  and  we  request  you  will 
have  the  goodness  to  order  examination  at  our  mills  at  Paterson, 
giving  us  the  necessary  permit  for  their  removal. 

"  We  had  written  on  this  subject  to  the  Secretary  of  the 
Treasury,  who  in  a  letter  received  to-day,  copy  of  which  we 
inclose,  refers  us  to  you  as  having  all  necessary  powers  in  the 
premises.  Yours  respectfully, 

"  (Signed)        Barbour  Brothers." 

To  that  letter  the  Collector  of  this  port  made,  two  days  later, 
the  following  reply  : 

"  Custom  House,  New  York  City,  ) 
Collector's  Office,  April  25,  1877.  \ 

"  Gentlemen  :  I  am  in  receipt  of  your  letter  of  the  23d  instant, 
and  in  reply  have  to  state  that  the  machinery  referred  to  may  be 
examined  at  your  mills  at  Paterson,  after  entry  and  payment  of 
duty,  and  after  payment  of  travelling  expenses  of  the  examiner. 

"  Very  respectfully, 

"  (Signed)  C.  A.  Arthur, 

"  Collector:' 

"  Messrs.  Barbour  Brothers, 

"  134  Church  street,  New  York,  N.  Y." 

This  letter  from  the  Collector  of  the  Port  contains  the  decision 
of  the  Custom-House  authorities  on  our  application  to  pass  our 
flax  machinery  free  of  duty,  as  provided  for  in  the  statute.  The 
Collector  refused  to  pass  our  machinery  without  the  payment  of 
duties,  and  notified  us  that  the  machinery  would  be  delivered 
only  on  the  payment  of  a  duty  the  rate  of  which  is  from  about 
40  to  60  per  centum.  * 

We   are   unwilling  to  pay  that  duty,  having  imported  the 


46 


machinery  in  the  belief  that  it  is  duty  free  under  the  law  I  have 
just  referred  to  ;  and  our  machinery  is  now  held  by  the  Collector, 
who  refuses  to  deliver  it  to  us  except  on  payment  of  the  duty. 
Our  only  resource  is  to  pay  the  duty,  which  would  amount  to  a 
very  large  sum,  and  then  sue  the  Collector  to  recover  it, — which 
would  not  only  be  expensive,  but  would  lock  up  a  large  amount 
•of  capital  .pending  the  decision. 

In  our  own  case  we  have  been  compelled  to  pay  duties  on 
flax  machinery,  and,  through  the  delays  and  lengthened  de 
tentions  of  the  Custom-House  officials,  we  have  been  under  the 
necessity  of  shipping  the  same  machinery  back  to  our  factories 
in  Great  Britain,  thus  being  compelled  to  delay  the  project  of 
running  the  machinery  in  our  mills  in  Paterson,  besides  losing 
the  duty  paid  to  the  United  States  Government.  This  we  have 
done  in  consequence  of  the  raw  material  or  merchandise  necessary 
for  the  working  of  such  machinery  being  unduly  detained  for  a 
lengthened  period  in  the  custody  of  the  United  States. 

We  have  patiently  resisted,  for  a  period  extending  over  five 
years,  positions  assumed  by  the  ignorant  officials  interfering  with 
our  importing  business  ;  and  in  no  one  instance  have  we  failed  to 
establish  the  fact  that  we  were  right,  as  a  firm,  and  that  the  gov- 
ernment of  the  United  States  was,  through  its  officials,  in  gross 
error. 

It  may  not  be  generally  known,  however,  that,  no  matter  how 
great  the  injury  inflicted  on  the  merchant  or  importer,  he  has 
no  redress  against  either  the  erring  official  or  the  government  of 
the  United  States.  It  will  thus  be  seen  with  what  safety  an  ap- 
praiser or  an  assistant  appraiser  can  exercise  and  bring  to  bear, 
either  through  ignorance,  caprice,  or  malice,  the  whole  power  of 
the  United  States  to  suspend  the  importing  business  of  an  hon- 
orable merchant  for  a  period  of  time  sufficient  to  virtually  ruin 
his  business. 

To  me  it  is  incomprehensible  how  such  a  state  of  things  can  be 
permitted  to  exist  in  a  free  country.  Such  tyranny  would  not  be 
attempted  in  the  most  despotic  governments  of  Europe,  as  is  per- 
petrated daily  in  the  city  of  New  York  under  the  cloak  of  law. 

Since  the  appointment  of  this  Committee  of  the  Chamber  of 
Commerce,  I  have  made  it  my  special  business  to  confer  person- 
ally with  many  of  the  importing  merchants  of  this  city.  I  can 
hardly  in  words  express  to  your  Committee  the  indignation  with 
which  they  repudiate  the  stigma  of  fraud  which  temporarily 
might  be  affixed  to  their  names  by  these  irresponsible  and  fre- 
quently ignorant  officials  of  the  government. 


47 


I  do  not  think  I  make  any  but  a  fair  statement  when  I  say 
that  the  importing  merchants  of  this  metropolis,  in  comparison 
with  the  merchants  of  any  commercial  city  of  the  civilized 
world,  stand  second  to  none  in  honor  and  integrity.  And  there 
are  no  people  who  are  more  jealous  of  their  reputation  and  good 
name,  which  deservedly  belongs  to  this  community;  I  mean  the 
importing  merchants  of  America,  and  more  especially  my  fellow- 
merchants  of  the  city  of  New  York. 

In  conclusion,  I  ask  this  honorable  Commission  to  recom- 
mend to  the  United  States  Government,  that  the  agents,  clothed 
with  such  extraordinary  powers  of  oppression,  should  also  be  sub- 
jected to  some  responsibility  ;  and  that  the  official  should  be  made 
to  suffer  for  acts  arising  out  of  his  gross  ignorance,  malice,  or 
stupidity. 

Before  resuming  my  seat,  permit  me  to  return  my  sincere 
thanks,  in  behalf  of  our  Committee,  and  also  on  my  own  behalf, 
for  your  courtesy  in  granting  us  this  lengthened  hearing  ;  and  I 
assure  you  that  the  result  of  this  day's  proceedings  will  be  looked 
for  with  deep  interest  by  the  merchants  of  New  York. 


•  ■  i  .    ■  n 

.J«9i«jrt&70g  arfj  to  B&i&fSo  Uwiou-gi  '{lia&up 


48 


ADDRESS  OF  MR.  JACKSON  S.  SCHULTZ. 

Mr.  Schultz  addressed  the  Commission  substantially  as  follows: 
Mr.  Chairman  and  Gextlemex  of  the  Commission  : 

After  what  you  have  heard  from  our  counsel,  stated  so  com- 
pactly, and  also  from  my  two  associates,  I  doubt  not  that  you  will 
think  the  subject  well-nigh  exhausted.  But  it  is  difficult  for  a 
merchant  to  be  long  engaged  in  an  inquiry  involving  so  much 
that  interests  his  profession  without  becoming  imbued  with  a 
spirit  very  much  akin  to  that  which  my  friend  Barbour  just  now 
manifested,  and  which  you  will  excuse  in  me,  I  am  sure,  when  you 
hear  how  fully  I  sympathize  with  him  in*  his  persecutions. 

I  do  not  know  what  limit  you  place  upon  your  inquiry.  I  un- 
derstand, however,  the  object  of  your  Commission  to  be  similar  to 
that  contemplated  by  our  appointment — namely,  to  ascertain  the 
difficulties  that  beset  the  collection  of  the  revenue,  and,  if  there 
are  any  errors  in  the  administration  of  the  Custom-House  service, 
to  point  them  out,  to  the  end  that  they  may  be  corrected. 

It  has  occurred  to  me  that  by  your  more  recent  instructions, 
which  your  chairman  has  just  read,  from  the  Secretary  of  the 
Treasury,  possibly  you  may  feel  yourselves  authorized  to  go  a  step 
further,  and  to  inquire  with  us  what  there  is  in  the  tariff  laws  or 
regulations  inconsistent  with  an  economical  collection  of  our  rev- 
enue. 

Xeither  your  Commission  nor  our  Committee  propose  to  attack 
the  principles  of  our  present  tariff.  We  do  not  discuss  or  inquire 
into  the  fact  whether  the  present  tariff  is  protective  to  our  manu- 
factures or  otherwise.  But,  in  the  language  of  the  resolution  by 
which  our  Committee  is  instructed,  we  are  to  inquire  into  the 
"  administration  of  the  customs  service,  and  present  such  informa- 
tion as  we  may  acquire  to  Congress  at  its  next  session." 

With  these  ends  in  view  almost  any  consideration  which  our 
experience  may  suggest  will  be  in  order. 

The  first  subject  I  bring  to  your  attention  is  included  in  the  6th 
and  22d  propositions  discussed  briefly  by  our  counsel — namely, 
"  Entries  to  betaken  in  charge  by  the  Custom-Mouse  officials,  and  to 
be  passed  the  same  dayP 

At  the  present  time,  and  under  our  present  system,  we  give  em- 
ployment to  about  one  hundred  and  fifty  brokers'  firms,  which  I 
estimate  will  employ  on  an  average  at  least  four  persons  each. 
This  will  give  us  an  aggregate  of  six  hundred  persons  whose  sole 
duty  it  is  to  facilitate  the  passage  of  entries. 

These  persons  are  a  direct  tax  upon  the  commerce  of  the  coun- 
try, and  of  all  the  non-producing  and  worthless  classes,  this  one 


49 


is,  in  my  judgment,  the  most  so,  and  must  be  dropped  out  of  our 
commercial  system  ;  and  I  beg  you  to  consider  how  this  economic 
service  can  be  accomplished. 

The  Custom-IIouse  broker  is  a  man  without  business  experience 
or  professional  knowledge  of  any  kind.  From  the  very  nature*  of 
his  calling,  he  becomes  technical  in  his  construction  of  laws  and 
regulations,  if,  indeed,  he  is  ever  required  to  think  at  all  ;  but  as 
his  business  is  the  merest  routine,  he  soon  learns  to  "  fall  into 
line"  and  "  hand  up  his  invoices,"  from  ten  to  twelve,  and  then  ad- 
journ to  lunch,  returning  for  two  hours  in  the  afternoon  to  fill  the 
corridors  and  passages  of  the  Custom  House. 

Suppose  a  merchant  has  an  invoice  of  merchandise  unknown  to 
our  present  classification,  involving  questions  of  value  which 
neither  tariff  laws  nor  Treasury  Regulations  have  contemplated  ; 
who  can  so  intelligently  explain  these  intricacies  as  the  merchant 
himself  ?  and  is  it  not  most  desirable,  both  on  account  of  the  cus- 
toms officials  and  their  intelligent  exercise  of  duty,  that  they  should 
have  just  the  kind  of  information  that  the  owner  or  consignee, 
and  he  alone,  can  give  ?  Why  should  the  exigency  of  this  service 
compel  merchants  to  absent  themselves  from  so  important  a  ser- 
vice both  to  themselves  and  the  government  ?  The  Deputy  Col- 
lectors should  impart  the  technical  knowledge  of  our  tariff  laws 
to  the  merchant,  while  the  merchant  could  in  many  instances 
impart  practical  information  to  the  Deputy  Collector. 

To  be  a  little  more  explicit,  let  me  indicate  the  practical  opera- 
tion of  the  system  of  entering  goods  we  think  you  should  com- 
mend. 

The  Deputy  Collectors  should  occupy  an  open  space,  such  as  the 
enclosed  space  in  the  present  rotunda  of  the  Custom  House. 
A  merchant  approaches  one  of  these  Deputies  and  hands  him  an 
invoice  enclosed  in  an  unsealed  envelope  ;  on  the  outside  of  this 
envelope  is  found  the  name  of  the  ship,  the  general  nature  of  the 
merchandise,  with  the  name  of  the  consignee,  date,  etc. 

The  Deputy  Collector  opens  the  envelope  hastily,  casts  his  eye 
over  its  contents,  and  notices,  first,  the  place  from  which  the 
merchandise  comes  ;  second,  that  it  is  in  the  currency  of  that  coun- 
try ;  third,  that  the  invoice  has  all  the  charges,  such  as  boxes, 
cartons,  inland  freight,  commissions,  etc.;  fourth,  that  the  proper 
consular  certificate  is  attached  ;  fifth,  that  the  requisite  number  of 
duplicate  copies  are  present.  When  satisfied  on  all  these  points, 
he  takes  the  oath  of  the  merchant  or  consignee  in  the  usual  form, 
and  dismisses  him  with  the  remark  that  he  may  call  at  the  cashiers 
desk  at  a  given  hour  to  receive  a  computation  of  his  duties,  when 
he  may  pay  his  gold  and  receive  his  order  for  his  goods. 
4 


50 


This  process  of  entering  goods  at  the  Custom  House  need  not 
delay  the  merchant  more  than  ten  minutes,  and  that  time  will  be 
ample,  besides,  for  any  explanation  which  either  party  may  desire 
to  make  or  give. 

Contrast  this  direct  method  with  our  present  system  of  circum- 
locution, the  objections  to  which  are,  first,  that  it  causes  delays, 
occupying  the  time  of  the  merchant  quite  as  long  to  employ  and 
explain  to  the  broker  as  it  would  to  go  direct  to  the  Deputy  Col- 
lector under  the  system  here  recommended  ;  second,  that  the  con- 
fusion and  annoyances  incident  to  the  pressing  of  large  numbers 
of  brokers,  each  trying  to  gain  the  attention  of  the  clerk,  is  well 
calculated  to  distract  his  mind  and  prevent  that  calm  and  quiet 
so  important  when  intricate  calculations  are  being  made  ;  and 
third,  while  one  desk  or  department  is  overworked,  another  may 
be  without  employment  for  long  periods  of  time. 

There  is  really  nothing  new  in  this  recommendation  ;  for  I  am 
informed  that  several  Collectors  have  had  this  plan  of  passing  en- 
tries under  consideration,  and  have  only  been  deterred  by  the 
humane  thought  that  so  many  brokers  would  be  thrown  out  of 
employment.  But  it  is  no  experiment,  since  the  French  Custom 
House  is  managed  much  in  this  way. 

You  will  observe  that  I  have  not  stated  what  is  notorious  :  that 
much  deception  and  even  frauds  are  often  committed  by  brokers. 
So  common  have  these  become  that  the  present  Collector  has  told 
you  that  he  is  exercising  a  control  over  them.  Several  cases  have 
been  related  to  me  where  goods  have  been  passed  at  one  duty  by 
the  broker,  and  collected  by  them  of  the  owner  at  another.  In 
one  case  goods  were  passed  free  by  the  Custom  House,  and  the 
broker  collected  the  duty.  Often  they  impose  charges  which  are 
not  contemplated  by  law  and  are  not  exacted  by  regulation. 

But  as  it  is  against  the  whole  system  of  brokerage  in  the  pas- 
sage of  invoices  that  we  object,  it  is  of  no  moment  that  such 
abuses  should  be  pointed  out. 

There  will  always  be  a  certain  amount  of  legitimate  brokerage 
business  done,  as,  for  instance,  for  consignees  living  out  of  the 
city,  or  men  who  require  bonds  that  they  cannot  themselves  pro- 
cure. But  this  is  legitimate  brokerage  agency,  which  facilitates 
commerce  and  will  be  maintained  under  any  system. 

Mr.  Tukntube  asked  whether  this  change  required  Congressional 
action. 

Mb.  Schultz  replied  that  he  thought  not.  He  thought  that  we 
need  not  go  any  farther  than  the  Collector,  certainly  not  farther 
than  the  Secretary  of  the  Treasury. 


51 

Mr.  Schultz  continued  :  I  may  as  well  say  now  what  has  not  yet 
appeared  in  any  of  the  statements.  We  propose  to  frame  a  law 
which  shall  take  the  place  of  all  existing  laws  and  Treasury  Regu- 
lations, and  while  doing  this  we  have  thought  it  best  to  include 
in  the  law  much  that  under  other  circumstances  we  should  leave 
to  the  regulation  of  the  Treasurer.  We  want  to  close  up  forever 
all  chance  for  misunderstanding,  and  it  is  to  that  end  that  we  are 
laboring. 

The  Chairman. — You  understand  the  last  instructions.  They 
are  :  "  In  regard  to  complaints  received  by  the  Commission  re- 
specting the  customs-revenue  laws,  and  made  with  a  view  to  their 
revision  and  improvement,  you  will  please  report  such  suggestions 
respecting  the  revision  and  improvement  of  the  customs-revenue 
laws  as  may,  after  careful  investigation,  meet  with  their  united 
approval." 

Mr.  Schultz. — Those  instructions  seem  ample  to  cover  the 
ground  entirely  ;  and  we  are  very  glad  that  it  is  so,  because  it 
will  lighten  our  work.  But  we  will  insist  upon  an  entirely  new 
law,  so  that  no  lawyer  can  hereafter  rise  and  quote  an  ordinance 
of  the  last  century.  We  want  to  bring  up  our  law  to  1877,  and 
to  have  that  law  so  plain  in  its  provisions  that  any  merchant  can 
understand  it. 

The  next  proposition  is  the  "  The  abolition  oj  the  Naval  Office" 
What  are  the  analogies  in  this  case  ?    How  do  merchants  and 
bankers  transact  their  business  ?    We  have  high  authority  for  the 
suggestion  that  hereafter  this  test  is  to  be  applied  to  all  public 
business. 

I  assert  that  the  Naval  Office  is  a  duplication  of  the  Collector's 
office,  and  but  little  more. 

A  recent  pamphlet  issued  in  the  interest  and  in  defence  of  that 
department  would  have  us  believe  that  this  office  is  an  auditing 
bureau,  and  is  indispensable  to  the  proper  administration  kof  the 
general  duties  of  collecting  the  revenue,  and  its  author  insists 
that  it  was  a  great  mistake  to  call  it  the  Naval  Office.  He  seems 
to  attach  great  importance  to  this  misnomer.  No  doubt  this  in- 
genious author  has  in  his  researches  come  across  the  true  origin 
of  the  department,  and  sees  in  that  origin  no  justification  for  its 
continuance. 

This  compilation  or  history  of  the  Naval  Office,  by  Mr.  Silas  W. 
Burt,  should  be  placed  in  the  archives  of  the  New  York  Historical 
Society,  so  that  our  future  historian  may  know  that  in  1877  we  did 
have  such  an  office  connected  with  our  customs-revenue  service. 
But  let  us  attend  to  the  analogies  of  this  office. 


52 


Do  merchants  have  two  general  offices,  in  the  books  of  which 
they  keep  duplicate  accounts  ?  Do  not  merchants  think  one  set 
of  books,  accurately  kept,  quite  enough  for  one  business  ?  Does 
any  bank  or  trust  company,  however  large,  ever  keep  duplicate 
ledgers  ?  Does  a  bank  keep  assistant  first  tellers  to  recount  the 
money  paid  out  over  its  counter  ? — and  yet,  if  anywhere,  dupli- 
cation of  service  would  seem  here  to  be  justified.  But  no  doubt 
the  bank  reasons  that  one  responsible  officer  is  better  than  two 
irresponsible  ones. 

Until  some  instance  can  be  found  in  mercantile  or  banking  ex- 
perience where  duplication  of  accounts  is  required,  I  shall  assume 
that  there  can  be  found  no  analogy  outside  of  the  present  customs 
service. 

Merchants,  banks,  and  trust  companies  do  have  general  book- 
keepers, and  sometimes  auditors,  but  they  overlook  only  the  one 
set  of  books  ;  and  this  excellent  precaution  is  followed  in  the  Cus- 
tom House,  and  is  quite  independent  of  the  Naval  Office. 

We  are  told  that,  as  a  matter  of  experience,  the  Naval  Office  does 
find  many  errors  in  the  accounts  that  come  to  it  from  the  Col- 
lector's office.  No  doubt  this  is  true  ;  it  is  just  what  we  might 
expect  from  a  divided  responsibility. 

I  think  it  was  Mr.  Beck,  from  Kentucky — then  Representative, 
now  Senator — who  said,  "  Out  in  his  country  they  have  a  senti- 
ment like  this  :  1  Never  allow  the  first  gatherer  of  wheat  to  be  in- 
terested in  the  second  rake.'  " 

Let  two  men  reduce  sterling  to  dollars,  and  they  will  seldom 
agree  to  a  cent,  even  after  many  times  trying  ;  and  as  this  Naval- 
Office  report  only  assures  *us  of  a  large  number  of  mistakes,  and 
does  not  give  the  aggregate,  we  may  assume  that  this  is  unimpor- 
tant. 

The  Chairman. — They  state  that  the  balance  of  errors  in  favor 
of  the  government  is  a  million  and  a  half. 

Me.  Schultz. — That  statement  has  not  been  published.  What 
does  the  Collector  say  to  this  statement  ?  I  should  like  to  have 
him  on  the  stand,  and  ask  him  why  he  has  retained  men  in  office 
who  were  so  incompetent.  If  there  is  no  explanation  to  these  vast 
errors,  then  I  shall  be  prepared  to  think  worse  of  the  Custom 
House  proper  than  ever  before. 

The  Naval  Office  has  about  seventy-five  men  employed,  costing 
for  salaries,  in  the  aggregate,  about  one  hundred  and  fifty  thou- 
sand dollars — not  to  include  incidentals,  such  as  stationery,  etc. 

Now,  gentlemen,  you  have  recommended  in  your  preliminary 
report  a  reduction  of  the  force  twenty  per  cent,  but  you  have 


53 


omitted  this  fungus  lot  altogether.  This  will  add  nearly  ten  per 
cent  additional. 

In  the  new  system  which  I  hope  will  be  the  outgrowth  of  the 
present  inquiry  there  should  be  no  Naval  Department. 

Let  us  now  consider  the  importance  and  proper  duties  of  the  ap- 
praisers ;  and  I  will  include  in  the  duties  of  this  department  that 
of  personal  baggage,  and  also  the  Debenture  Bureau. 

The  duties  of  the  appraisers'  office  would  indicate  knowledge  of 
merchandise.  Each  officer,  to  perform  his  duty  properly,  must 
have  had  experience  in  the  values  and  sale  of  goods;  and,  better 
yet,  if  possible  they  should  have  knowledge  of  the  cost  and  pro- 
cesses of  manufacture. 

Now  I  by  no  means  join  in  the  general  idea  that  all  our  ap- 
praisers are  incompetent — mere  politicans  ;  for  I  know  many  of 
them  to  be  quite  competent.  But  this  I  do  say  :  that  too  little 
attention  is  paid  to  the  assignment  of  men  to  such  departments  as 
will  give  them  a  chance  to  be  of  the  most  service  ;  and  I  do  say 
that  they  are  inadequately  paid.  When  we  consider  the  vast 
power  and  responsibility  exercised  by  these  men,  and  the  great 
temptations  to  which  they  are  subjected,  we  have  no  hesitation  in 
saying  that  they  have  too  much  strain  for  their  pay. 

I  remember  to  have  heard  the  late  Mr.  A.  T.  Stewart  say  that 
in  his  judgment  ten  thousand  dollars  per  year  would  not  be  too 
much  to  pay  appraisers  in  those  departments  where  the  German, 
French,  and  Swiss  goods  were  appraised,  and  he  was  no  doubt 
right. 

It  does  not  follow,  as  some  seem  to  suppose,  that  all  appraisers 
should  have  these  large  salaries,  but  only  such  as  have  special  ex- 
pert knowledge  and  tastes,  and  are  so  circumstanced  as  to  be  able 
to  know  not  only  the  intrinsic  value  of  goods  but  the  added  value 
of  "  fashion"  and  "  taste." 

Under  the  system  which  our  Committee  will  recommend,  the 
appraisers'  department  will  be  greatly  magnified  in  importance. 
Indeed,  it  will  be  the  principal  department  in  fact  as  it  is  now  in 
theory.  Guarded  by  proper  appeals,  which  under  our  present 
system  are  known  as  "  merchant  appraisements,"  but  under  the 
new  system  will  be  courts  of  arbitration  in  which  the  merchant 
or  consignee  will  have  at  least  a  single  voice,  we  may  assume  that 
the  appraisers'  department  of  this  port  will  meet  with  fewer  hin- 
drances than  now,  and  that  its  decisions  will  be  respected  in  every 
port  and  Custom  House  in  the  country. 

Our  counsel  has  told  you  that  our  plan  contemplates  that  the 
Custom  House  shall  actually  take  possession  of  the  goods,  and 
hold  them  until  they  have  made  the  necessary  examination.  But 


54 


I  shall  be  told  that  our  present  system  permits  this.  So  it  does 
But  the  practical  working  of  the  system  only  takes  one  case  out 
of  each  lot,  or,  where  the  packages  are  numerous,  one  case  in  ten, 
and  in  the  hurry  of  business  seasons  even  this  limited  examination 
is  not  always  insisted  upon  ;  and  it  is  this  looseness  in  conducting 
the  examination  that  induces  fraud.  If  every  importer  knew  that 
every  case  and  package  was  to  pass  under  the  observation  of  a 
vigilant  examiner,  there  would  be  no  attempt  at  deception. 

The  objections  to  this  more  thorough  examination  are  two  : 
first,  it  is  too  expensive  for  the  government  ;  and  second,  it  is  ob- 
jectionable on  the  ground  of  delay  to  the  merchant. 

In  regard  to  the  first,  I  have  this  to  say  :  that  careful  inquiries 
satisfy  me  that  from  orre  to  one  and  a  half  per  cent  would  take  the 
entire  package  merchandise  arriving  at  this  port,  convey  the 
same  to  a  suitable  warehouse  from  the  ship,  unpack,  replace,  and 
deliver  the  merchandise  to  the  consignee,  and  do  it  on  an  average 
of  five  days,  never  in  any  instance  to  be  over  ten  days.  Now,  as 
the  average  tariff  duties  laid  on  merchandise  are  over  forty  per 
cent,  could  not  the  government  well  afford  to  pay  this  one  and  a 
half  per  cent,  particularly  as  we  are  assured  by  competent  author- 
ity that  under  our  present  system  we  are  not  collecting  over  sixty 
per  cent  of  the  forty  odd  per  cent  to  which  we  are  entitled  ? 

But  the  consignee  objects  to  the  delay.  At  present  he  has  ten 
per  cent  of  his  invoice  detained  often  thirty  days,  and  is  restrained 
in  the  disposal  of  even  the  goods  he  gets  for  two  years  ;  for  they 
may  at  any  time  during  two  years  be  ordered  back  for  reappraise- 
ment.  Of  course  this  is  not  usual  or  possible,  and  yet  the  liability 
follows  the  goods  for  all  that  time.  It  is  very  common  to  have 
the  goods  delivered  ordered  back  twenty  and  thirty  days  after 
they  have  been  delivered  from  the  ship,  and  this  is  possible  and 
often  enforced. 

Now  the  practical  question  which  the  importers  will  be  called 
upon  to  decide  is  this  :  How  long  a  delay  will  they  consent  to 
suffer  in  the  delivery  of  their  goods,  in  lieu  of  the  present  system, 
provided  the  examination  and  delivery  is  to  be  final  ?  Will  they 
submit  to  five  days  ?    Will  they,  as  an  extreme  period,  wait  ten  ? 

An  expert  in' the  business  of  handling  merchandise  has  given 
the  opinion  that  at  least  ten  per  cent  of  the  merchandise  could  be 
delivered  each  day  following  the  landing. 

Now  let  us  suppose  that  the  appraisers'  department  is  prepared 
to  perform  its  duty  of  examination  as  promptly  as  the  laborers 
and  counters  are  ready  to  expose  the  goods.  Then  on  each  day 
following  the  discharge  of  the  ship,  the  consignee  will  receive  one 
tenth  of  his  goods  where  the  amount  were  large  ;  and  where  there 


.55 


were  single  packages,  they  could  be  delivered  on  the  same  day  of 
arrival  at  public  store. 

This  expeditious  plan  would  contemplate  a -public  store  for  each 
line  of  steamers,  and  each  ship's  cargo  would  be  fully  delivered 
before  the  arrival  of  the  succeeding  ship  of  the  same  line. 

If  it  is  said  that,  by  detentions  on  the  voyage,  two  ships  of  the 
same  line  maybe  discharging  at  the  same  time,  I  say  in  answer  that 
additional  force  will  overcome  any  such  temporary  disturbance. 

"  Where  there  is  a  will  there  is  a  way,"  says  the  proverb,  and 
our  Custom-House  authorities  should  learn  from  its  spirit. 

Of  course  I  am  only  providing  for  steamships  ;  sailing  vessels 
with  general  cargoes  could  be  provided  for  as  now,  by  a  single  in- 
spector for  each  ship. 

The  feature  of  this  plan  to  which  I  call  your  attention  is  that 
each  cargo,  as  delivered,  goes  to  public  store  and  is  delivered  in 
the  order  received  and  as  fast  as  examined 

If  a  merchant  like  A.  T.  Stewart  can  receive  200  cases  of  foreign 
goods  on  Saturday,  and  with  his  limited  facilities  unpack  and  dis- 
tribute them  in  four  times  that  number  of  packages  all  over  the 
country  by  Monday  night,  then  surely  the  task  I  have  assigned 
to  the  Custom-House  authorities  can  be  accomplished  with  the 
adequate  force  at  their  command. 

This  appraisers'  department  should  always  have  charge  of  the 
personal  baggage,  as  also  the  goods  shipped  abroad  subject  to  de- 
benture or  drawback,  for  reasons  too  obvious  to  question.  In  this 
department  is  all  the  expert  knowledge  of  values  pos>essed  by  the 
Custom  House,  and  without  this  practical  knowledge  the  value  of 
personal  baggage  or  goods  manufactured  and  shipped  abroad  sub- 
ject to  reclaim  of  duty,  or  goods  shipped  in  bond,  so  far  as  the 
latter  is  presented  for  identification,  must  pass  under  the  observa- 
tion of  the  appraisers'  department. 

Let  me  say  a  distinctive  word  about  personal  fciyuage,  because 
it  is  a  subject  of  scandal  to  our  nation.  I  was  about  to  say  that 
no  American  who  goes  abroad  is  innocent.  Certainly  the  excep- 
tions are  few.  Both  men  and  women  turn  smugglers,  unconscious, 
seemingly,  of  the  crime  they  commit.  They  seem  to  think  noth- 
ing of  it.  They  even  laugh  about  it,  and  boast  of  it  to  their  friends. 
There  is  a  serious  moral  wrong  in  this  whole  matter  which  we 
must  sooner  or  later  consider.  It  is  a  great  wrong  to  the  import- 
ing merchant  ;  it  is  a  still  greater  wrong  to  the  government  ;  and 
the  defiant  practice  demoralizes  the  whole  community  and  makes 
them  careless  of  legal  restraint. 

The  purchases  abroad  by  passengers  are  not  confined,  as  many 
suppose,  to  the  personal  wants  of  the  passenger  or  his  immediate 


56 


family,  but  other  persons,  and  even  other  families,  send  for  articles 
of  dress  which  they  were  better  not  to  have. 

The  means  resorted  to  by  botli  males  and  females  to  conceal 
their  illicit  traffic  is  most  ingenious.  I  have  known  females  to  con- 
ceal watches  in  old  shoes  and  laces  in  soiled  linen.  Nor  are  these 
practices  confined  to  people  of  the  world,  who  make  no  pretensions 
to  scrupulous  lives  ;  but  I  have  known  ministers  of  the  Gospel  and 
their  wives  to  conceal  and  pass  goods  that  were  dutiable.  The 
most  remarkable  case  that  ever  came  to  my  knowledge  was  re- 
lated by  a  detective  of  the  Treasury,  who  once  traced  a  valuable 
shawl  that  had  been  smuggled  to  the  wife  of  a  United  States 
judge  in  one  of  our  Eastern  States,  and  the  shawl  was  recovered. 
On  a  recent  return  voyaVe  from  Europe  there  were  four  members 
of  Congress,  but  they  did  not  pay  all  their  duties. 

Say  what  we  svill,  think  as  we  may,  there  is  something  about 
this  tax-collecting  tariff  imposition  which  all  mankind  in  all  coun- 
tries evade  when  they  can,  and  think  it  no  sin  or  wrong.  If  we 
are  to  collect  duties  from  personal  baggage,  we  must  adopt  some 
other  and  more  stringent  method  than  any  now  devised.  And, 
after  all,  that  is  what  most  interests  your  Commission. 

This  is  my  suggestion  :  that  each  passenger  be  allowed  one 
trunk  or  package,  after  examination,  to  be  landed  with  him  on 
arrival,  and  all  others  to  be  sent  to  the  public  store  for  future  ex- 
amination, and  make  no  discriminating  exceptions  in  this  case 
more  than  in  passing  ordinary  dutiable  goods  in  cases.  The  effect 
of  this  order  would  at  once  be  to  reduce  the  amount  of  baggage 
to  one  or  two  trunks  for  each  passenger. 

The  proposition  to  abolish  triplicate  invoices  and  consular  certifi- 
cates is  more  fully  accomjjlished  by  abandoning  our  whole  consu- 
lar system.  This  would  seem  to  me  the  more  direct  way  of  ac- 
complishing the  reform  we  desire.  It  would  cut  that  dog's  tail 
off  behind  his  ears. 

In  view  of  the  tax  which  this  system  imposes  upon  commerce, 
and  with  the  knowledge  that  it  is  so  often  made  to  oppress  and 
embarrass  the  merchants,  I  had  come  to  the  conclusion  that  the 
only  way  out  of  the  difficulty  was  to  recommend  a  discontinuance 
of  the  whole  system.  But  then  I  reflected  that  in  the  early  his- 
tory of  our  government  the  consular  system  was  made  useful,  and 
even  is  now  serviceable  to  Americans  travelling  abroad  ;  and  par- 
ticularly when  I  meet  with  the  following  extract  from  the  Phila- 
delphia Ledger^  seemingly  by  authority  of  our  new  Secretary  of 
State,  I  confess  that  I  begin  to  see  a  new  use  for  consulates  abroad  : 

"  Secretary  E\  arts  proposes  to  reorganize  the  consular  system 
after  the  plan  adopted  by  Great  Britain.    In  appointing  consuls 


57 


it  is  proposed  to  secure  men  having  a  knowledge  of  commerce  and 
manufactures,  selecting  commercial  men  for  commercial  districts, 
and  for  manufacturing  districts  men  acquainted  with  the  special 
manufactures  of  the  districts  to  which  they  may  be  assigned.  The 
consuls  will  be  instructed  to  carefully  note  the  progress  made  in 
manufactures,  send  samples  of  all  textile  fabrics,  and  report  in 
detail  the  process  and  cost  of  all  manufactures,  in  order  that 
American  manufacturers  may  be  fully  informed  upon  this  subject 
and  be  prepared  to  introduce  such  of  them  as  may  prove  profit- 
able to  American  industry  and  enterprise.  At  the  commercial 
districts  the  consuls  will  be  required  to  make  themselves  familiar 
with  the  local  exports  and  imports,  the  destination  of  the  former 
and  consumption  of  the  latter,  and  report  from  time  to  time  what 
commodities  of  American  production  might  be  added  to  American 
export  with  profit  to  American  commerce.  This  system,  if  pro- 
perly carried  out,  would  be  of  great  advantage  to  our  home  in- 
dustries, and  by  keeping  American  manufacturers  and  merchants 
fully  informed  as  to  the  character  and  demands  of  foreign  markets, 
would  enable  them  to  add  largely  to  the  variety  and  valuation  of 
American  exports." 

If  Ave  carefully  consider  the  opportunities  of  our  consuls  abroad 
to  examine  the  merchandise  about  which  and  of  which  they  cer- 
tify, we  shall  give  to  their  certificates  just  about  as  much  conse- 
quence as  our  customs  authorities  do — and  that  is  none  at  all. 
They  never  see  the  cases,  much  less  the  goods  they  contain  ;  and 
except  the  information  obtained  from  the  bills  of  lading  or  the 
forwarding  certificate,  they  cannot  even  know  the  number  of  cases  ; 
and  but  for  their  most  obliging  and  accommodating  nature  (for 
which  they  are  amply  paid),  they  would  be  a  most  serious  hin- 
drance to  the  prosecution  of  foreign  commerce.  They  have  ex- 
tensive powers  to  detain  goods,  to  send  for  and  require  samples  ; 
but  this  they  seldom  do,  for  if  the  samples  were  before  them,  they 
would  not  add  to  their  knowledge.  For  such  purposes  as  contem- 
plated in  the  extract  just  quoted  consuls  abroad  may  serve  a 
most  important  purpose  ;  but  for  the  purposes  for  which  they  are 
now  used  their  office  is  worse  than  a  sinecure. 

If,  as  seems  probable,  commerce  and  commercial  men  are  to 
receive  recognition  in  the  future,  particularly  when  the  foreign  in- 
terests of  our  government  are  to  be  promoted  and  our  manufac- 
turing interests  extended,  then  we  shall  hail  the  efficient  co-opera- 
tion of  our  consuls  and  ministers  abroad  as  aids,  and  not  hin- 
drances as  now.  But  whatever  may  be  the  future  of  our  consular 
service,  the  system  of  triplicate  invoices  and  consular  certificates 
should  be  abolished. 


58 


No  Charges  should  be  made  on  Goods  entered  for  Consumption. 

A  suggestion  which  dropped  from  one  of  your  Commission  has 
emboldened  me  to  insist  that  when  goods  are  held  for  examina- 
tion for  the  accommodation  of  the  government,  all  expenses  in- 
curred while  so  held  should  be  paid  by  the  party  accommodated  ; 
if,  on  the  other  hand,  the  importer  desires  for  his  accommodation 
that  the  goods  should  go  to  public  store,  then  he  should  pay. 

This  statement  keeps  in  mind  the  recognized  equities  between 
merchants  ;  and  there  can  be  no  reason  why  the  merchant  who  is 
both  willing  and  anxious  to  receive  and  pay  the  duties  on  his 
goods,  while  the  government  for  its  own  convenience  and  better 
security  chooses  to  hold  them  and  cart  them  to  a  public  store — 
there  is,  I  insist,  no  reason  why  the  merchant  should  pay  for  this 
service.  Please  remember  that  the  government  does  recog- 
nize this  principle  in  all  "  bulk  cargoes."  They  do  not  insist  on 
carting  "  sugars,"  "  hides,"  "  iron,"  and  the  like,  to  public  store, 
but  "  examine,"  "  weigh,"  and  "  deliver"  on  the  dock.  If  the 
nature  of  the  cargo  is  such  that  the  government  cannot  examine 
it  on  the  vessel  or  dock  to  determine  the  amount  of  interest  it  has 
in  the  same,  then  I  insist  they  must  pay  all  expenses  up  to  the 
point  of  the  delivery  and  ascertainment  of  such  interest. 

1  ask  that  Damage  Allowance  be  discontinued. 

It  has  been  stated  by  our  counsel  that  the  merchants  in  their 
letters  to  the  Committee  are  about  equally  divided  on  this  point. 
That  the  subject  is  not  free  from  difficulty  must  be  conceded.  It 
is  only  when  we  are  trying  to  balance  the  merits  and  demerits  of 
damage  allowances  that  we  are  led  to  the  conclusion  that,  on  the 
whole,  it  is  better  for  the  importer  to  get  his  remedy  against  the 
consignor,  ship,  or  insurance  company,  rather  than  to  "seek  it 
through  the  Custom  House. 

I  think  if  it  can  be  shown  that  damage  can  be  insured  against,  as 
in  the  case  of  "  damages  of  the  sea,"  then  in  that  case,  where  the 
insurance  companies  pay  on  the  "  home  value,"  that  the  importer 
should  not  have  any  damage  allowance  ;  and  to  the  extent  he  does 
get  such  allowance,  he  makes  money  by  the  damage  allowance 
over  and  above  what  he  would  make  on  sound  goods,  and  the  en- 
forcement of  such  an  interest  is  against  public  policy. 

If  the  damage  is  latent,  or  comes  from  inherent  defects  in  the 
goods  themselves — as,  for  instance,  gloves  are  packed  "  damp," 
and  when  they  arrive  are  "  spotted  " — the  claim  should  be  against 
the  manufacturer  or  shipper,    If  there  is  bad  stowage  on  ship- 


59 


board — as,  for  instance,  where  oil  is  placed  on  dry  goods  and  the 
oil  leaks  through — in  this  case  the  vessel  is  liable.  If,  by  stress 
of  weather,  a  portion  of  the  cargo  is  thrown  overboard,  then  the 
remainder  pays  a  "  general  average."  If  salt  water  gets  in  the  hold 
and  damages  the  cargo,  the  insurance  companies  then  pay.  So 
that,  you  see,  a  case  can  hardly  be  conceived  in  which  the  risk  can- 
not be  covered. 

But  there  is  one  other  view  which  will  no  doubt  weigh  with 
some  men.  Manufacturers  who  claim  that  the  tariff  is  intended 
to  protect  them  might  insist  that  although  goods  are  damaged, 
they  do  enter  into  consumption  and  competition  with  their  product, 
and  should  therefore  be  fully  taxed.  But  this  can  only  have  force 
as  to  such  goods  that  are  partially  damaged.  But  if  we  take  the 
general  class  of  textile  fabrics,  it  is  probably  true  that  "  damage 
allowances"  do  more  to  bring  them  into  competition  with  home- 
made goods  than  any  other  cause. 

It  is  the  common  complaint  of  cloth  dealers  that  they  are  un- 
dersold, and  the  market  disturbed  by  damage  allowances.  If 
damage  allowances  could  be  always  adjusted  upon  strictly  equi- 
table principles  and  impartially,  then  less  objection  would  be  made. 
But  that  such  is  not  the  belief  of  merchants  generally  I  think 
will  be  conceded  ;  and  if  we  could  take  the  vote  on  the  question,  we 
should  find  arrayed  on  the  one  side  or  the  other  the  men  whose  in- 
terests are  served  or  injured. 

Take,  to  illustrate,  the  plate-glass  importers.  During  our 
moiety  controversy  we  learned  much  of  their  views  on  this  sub- 
ject. It  is  understood  that  plate-glass  men  were  among  the  first 
to  advocate  and  promote  damage  allowances.  The  tariff  on 
their  goods  varies  from  3  cents  to  50  cents  per  square  foot,  and  the 
damage  comes  from  breakage.  If  large  plates  are  broken  up  into 
small  ones,  the  difference  in  duty,  if  no  damage  allowance  is 
made,  would  really  render  it  profitable  to  throw  the  invoice  over- 
board. In  this  respect  glass  is  something  like  fruits  :  if  damage 
arises,  it  is  total,  particularly  if  full  duties  are  paid.  But  there 
are  some  houses  that  have  the  happy  faculty  of  getting  about  32 
per  cent  damage  allowance  on  all  the  glass  they  import,  and 
there  are  others  who  get  only  five  or  six  per  cent  on  the  average. 
This  class  don't  happen  to  break  so  much  ;  but  they  say  that 
they  cannot  compete  with  those  more  fortunate  men  whom  the 
Custom  House  certifies  as  being  unfortunate. 

These  goods  cannot  be  opened  on  the  dock,  nor  safely  in  the 
public  stores.  The  cases  are  usually  sent  to  the  warehouses  of  the 
consignee,  and  are  opened,  cases  standing  against  the  walls  of  his 


60 


store  ;  and  the  appraisers  go  to  these  stores  on  their  way  clown  in 
the  morning  and  give  a  damage  certificate,  and  it  is  no  doubt 
usually  a  pretty  liberal  one.  The  houses  which  fail  to  get  such 
allowances  complain  that  these  allowances  are  too  liberal,  and 
that  it  interferes  with  the  regularity  of  the  trade.  Such  was  the 
feeling  in  1874,  and  I  have  no  reason  to  doubt  that  the  same  feel- 
ing continues. 

Cargoes  of  coffee  and  other  merchandise  are  sold  subject  to 
damage  allowances.  And  it  seems  generally  understood  that 
some  parties  can  get  these  allowances  when  they  are  denied  to 
others,  or  get  them  to  a  more  liberal  extent. 

It  is  not  necessary  for  my  purpose  to  show  that  these  damage 
allowances  are  unjustly  given  or  withheld.  It  is  only  necessary 
for  me  to  show  that  they  give  rise  to  much  dissatisfaction  in 
trade  and  cause  great  bitterness  of  feeling  among  merchants. 

When  a  man  is  called  upon  by  his  single  judgment  to  determine 
the  amount  of  damage  on  goods  paying  60  to  100  per  cent  duty, 
he  is  more  than  a  man  if  he  can  for  a  long  time  escape  suspicion 
of  partiality. 

But  you  ask,  What  is  the  practical  remedy?  In  addition  to  the 
suggestions  already  made,  I  would  either  allow  the  goods  to  be 
reshipped  or  destroyed.  Either  of  these  extreme  remedies  might 
illustrate  the  folly  of  our  whole  system  of  tariffs  ;  but  it  would  be 
far  better  to  submit  to  this  loss  and  waste  than  to  inflict  on  the 
importer,  as  now  often  happens,  the  payment  of  duties  on  goods 
that  are  hardly  worth  the  amount  paid. 

Equalizing  Duties  at  different  Ports. 

It  would  be  a  rash  suggestion  to  propose  to  restrict  the  entry 
of  foreign  goods  to  the  few  principal  seaports,  like  Boston,  New 
York,  Philadelphia,  Baltimore,  Xew  Orleans,  etc. 

At  present  we  have  more  than  a  hundred  Custom  Houses  in  the 
interior,  and  their  proper  and  effective  management  for  the  col- 
lection of  duties  is  simply  impossible.  Many  of  them  have 
but  a  single  appraiser,  and  no  one  man,  however  gifted,  can  know 
the  cost  or  market  value  of  a  single  line  of  goods.  But  why  ob- 
ject to  their  discontinuance  ?  The  members  of  Congress  from  the  in- 
terior will  not  allow  these  interior  Custom  Houses  to  be  abandoned, 
and  hence  Our  system  must  be  adjusted  to  meet  this  anomalous 
condition  of  things.  But  for  this  fact,  a  most  unerring  system  of 
appraisement  could  be  arranged  on  the  basis  of  home  valuation, 
with  such  a  system  of  forfeitures  and  penalties  as  is  established 
in  Great  Britain — namely,  when  difference  of  opinion  arises  be- 


61 


tween  the  importer  and  the  government  official  as  to  the  true 
value,  the  government  has  its  remedy  by  adding  a  small  per- 
centage and  taking  the  goods  for  the  account  of  the  government. 
Such  a  system  could  be  inaugurated  here,  but  for  the  fact  that  in 
the  great  majority  of  Custom  Houses  in  the  country  we  have  no 
means  of  knowing  either  cost  price  or  market  value  of  goods.  . 

But,  to  return  from  this  digression,  we  must  have  better  provi- 
sion for  the  equalizing  of  values  at  the  different  ports. 

The  significant  case  which  was  related  by  our  counsel  as  occur- 
ring in  his  own  practice  and  within  his  own  knowledge  I  am 
assured  is  not  uncommon.  It  should  be  remembered  that  the 
transportation  to  and  from  the  interior  Custom  House  would  only 
be  one  or  two  per  cent  on  the  value.  Now  if  twenty  or  even  ten 
per  cent  can  be  saved  in  duties  by  the  process,  you  can  understand 
that  the  temptation  is  too  strong  to  be  resisted. 

A  case  occurred  a  few  years  ago  in  my  own  business  which  fitly 
illustrates  the  importance  of  equalization  of  duties  at  different  Cus- 
tom Houses.  A  competing  house  in  Boston  was  receiving  from  par- 
ties in  Liverpool  a  grease  known  as  English  sod  oil.  For  a  time  the 
article  passed  as  grease  in  both  Boston  and  New  York,  at  grease 
duty  of  10  per  cent;  but  as  our  Custom  House  had  imported  from 
New  Jersey  a  man  for  their  appraiser,  he  in  his  zeal  advanced 
the  rate  to  20  per  cent,  under  the  plea  that  this  sod  oil  was  a  man- 
ufactured oil.  For  many  years  I  had  been  used  by  the  Custom 
House  as  an  expert  in  regard  to  this  class  of  oils  (oils  suitable  for 
the  finishing  of  leather),  but  all  at  once  I  had  lost  my  knowledge, 
and,  as  I  was  an  interested  party,  of  course  I  could  not  very  well 
impress  myself  upon  the  department,  and  I  had  to  submit  and 
allow  the  grease  to  be  called  manufactured  oil.  Meantime,  how- 
ever, the  Boston  Custom  House  continued  to  pass  the  article  as 
grease,  at  a  duty  of  10  per  cent. 

This  alternative  was  presented  to  me  :  I  might  take  an  appeal 
to  Washington  and  run  the  risk  of  getting  beaten,  and,  in  case  I 
did,  drive  my  friend  from  Boston  out  of  the  trade  and  deprive  my 
correspondent  in  Liverpool  of  the  American  trade  in  sod  oil,  or,  by 
quietly  submitting,  allow  both  to  continue  a  lucrative  business,  so 
long  as  the  Boston  appraisers  would  continue  to  allow  this  article 
at  a  duty  of  10  per  cent. 

This  trade  did  go  round  New  York  and  my  firm  for  two  years 
or  more,  but  finally  one  of  the  equalizing  agents  found  his  way 
to  Boston,  and  the  classification  was  changed  there,  as  it  had  been 
in  New  York,  and  then  we  were  both  put  out  of  the  trade.  Then 
I  felt  myself  at  liberty  to  take  an  appeal,  and  did  so  on  a  lot 


62 


of  sod  oil  which  I  caused  to  be  sent  on  purpose.  This  appeal  was 
successful,  and  at  both  New  York  and  Boston,  ever  since,  both  the 
sod  oil  of  England  and  the  de  gras  of  France  have  come  in  as  the 
residuum  of  oil,  or  grease,  at  10  per  cent  duty. 

I  call  to  mind  this  experience  to  show  the  wrong  the  stupid 
judgment  of  an  appraiser  occasioned  to  the  trade  of  a  single  house 
by  dissipating  and  diverting  a  trade  which  we  have  never  been 
able  to  fully  regain. 

This  is  by  no  means  an  exceptional  case.  There  are  many  errors 
of  classification  now  running  between  different  Custom  Houses  well 
known  to  merchants,  but,  from  feelings  of  self-interest  or  reluc- 
tance to  turn  informers,  they  remain  quiet,  as  we  did,  and  submit 
to  the  wrong. 

It  seems  not  inappropriate,  in  this  connection,  that  I  call  your 
attention  in  an  especial  manner  to  the  large  responsibility  of  a 
class  of  public  officers  who,  like  the  damage  appraisers,  have  oppor 
tunities  to  make  or  unmake  the  fortunes  of  merchants. 

Omitting  weighers  and  gangers,  about  whom  you  have  heard  so 
much,  let  me  call  your  attention  to  "  samplers,"  and  only  one 
kind  of  them — namely,  those  who  sample  sugar. 

One  of  your  Commission  is  better  informed  on  this  subject 
than  any  other  person  present,  and  could,  if  he  would,  give  you  in 
private  a  most  interesting  chapter  on  the  processes  of  collecting 
duties  on  sugar.  But  as  he  may  feel  too  delicate  to  expose  the 
secrets  of  his  heart,  I  shall  venture  to  hint  at  least  at  some  of  the 
weak  spots  in  this  sugar  trade,  particularly  as  recently  new  com- 
plications have  arisen — complications  that  are  likely  to  overturn 
the  whole  system  on  which  we  have  been  proceeding  during  the 
past  years. 

We  estimate  the  duty  on  sugar  by  the  "  Dutch  standard  "  of 
color.  When  the  sampler  brings  in  his  samples,  they  are  compared 
with  these  colors,  and  the  duty  assessed  is  from  one  and  a  half  to 
four  cents  per  pound. 

It  must  be  apparent  to  you  that  it  is  of  much  consequence  to 
the  owner  whether  he  pays  the  lowest  or  highest  of  these  duties, 
and  it  is  not  unnatural  to  suppose  that  he  will  do  all  that  an  hon- 
est man  can  to  bring  out  as  favorable  a  result  as  possible. 

All  or  nearly  all  depends  on  the  sampler.  He  can  make  the 
duty  cost  in  the  aggregate  on  the  cargo  eight  thousand  or  twenty 
thousand  dollars.  Is  not  this  sampler,  then,  a  much  more  impor- 
tant man  than  the  Collector  ?  The  Collector  is  a  man  with  com- 
paratively limited  power,  and  you  have  an  appeal  from  his  deci- 
sions if  you  think  him  wrong  ;  but  the  sampler,  if  wrong,  is  never 


63 


likely  to  have  his  decision  appealed  from.  If  he  is  too  favorable 
for  the  government,  he  is  reasoned  with  and  asked  to  resample  ; 
but  if  he  is  too  favorable  for  the  importer,  there  is  no  government 
interest  which  interferes. 

How  are  these  samples  taken  that  are  to  decide  the  issue  be- 
tween eight  and  twenty  thousand  dollars  ?  After  boring,  the  tryer 
is  shoved  in  each  hogshead.  Now,  whether  the  tryer  is  directed 
upwards  or  downwards  in  the  cask  will  often  make  a  difference  of 
one  half  a  cent  on  the  pound  duty  on  the  whole  cargo. 

But  besides  this  facility  to  favor,  there  are  many  others  which 
may  be  practised.  Unequal  quantities  may  be  taken  from  differ- 
ent casks,  so  that  when  they  are  mixed  and  blended  the  average 
color  may  be  influenced  one  or  two  shades. 

Let  me  suppose  that  the  shippers  or  owners  of  sugar  in  a  foreign 
country  come  to  understand  that  one  house  better  than  another 
can  procure  these  favorable  reports  through  this  sampling  pro- 
cess ;  what  would  be  their  course  in  future  shipments  ?  Would  it 
not  be  to  send  consignments  to  those  houses  which  gave  the  best 
aggregate  return  ? 

I  know  how  delicate  this  subject  is.  I  know  how  many  delicate 
interests  are  involved  in  these  hints,  and  yet  I  know  they  will  be 
keenly  appreciated  by  all  importers  and  dealers  in  sugars. 

The  remedy  is  in  a  change  of  the  whole  system.  The  "  Dutch 
standard  "  must  be  sent  back  to  Holland.  With  their  proverbial 
honesty  it  may  be  suited  to  discriminate  the  value  of  sugars, 
but  our  people  have  outgrown  it. 

It  has  come  to  light  that  within  a  year  they  have  commenced  to 
color  artificially  the  crude  or  raw  sugars  which  come  from  some  of 
our  largest  sugar-producing  markets.  This  coloring  matter  is  not 
detrimental  to  the  saccharine  value  of  the  sugar,  and  does  not 
weigh,  and  is  readily  removed  in  the  process  of  refining.  This 
new  invention,  if  nothing  before  had  done  so,  demonstrates  that  the 
standard  by  color  must  be  abandoned. 

As  a  very  large  proportion  of  our  duties  is  collected  on  sugars, 
I  judge  that  your  Commission  will  deem  it  your  duty  to  take  into 
consideration  this  difficult  but  important  subject. 

Here  some  moralist  says,  "  If  merchants  are  the  high-toned  and 
honorable  class  they  are  represented,  why  will  they  be  thus  tempted 
and  also  tempt  others  ?"  My  answer  is  that  government  should 
make  it  possible  for  a  conscientious  and  honorable  merchant  to 
live  by  obeying  the  law,  and  not,  as  now,  so  largely  make  it  the 
interest  of  men  to  evade  or  directly  set  the  law  at  defiance.  The 


64 


only  alternative  in  this  matter  is  that  the  duties  on  sugar  should 
be  made  specific. 

There  is  always  a  standing  conspiracy  to  deplete  the  public 
Treasury. 

There  are  usually  about  four  thousand  suits  pending  ;  most 
of  these  are  nominally  against  the  Collector  for  the  repayment  of 
overpaid  or  wrongfully-paid  duties.  Nine  tenths  of  this  litiga- 
tion is  the  direct  consequence  of  our  ambiguous  revenue  laws, 
which  brokers,  experts,  and  lawyers  avail  themselves  of  to  de- 
plete the  Treasury. 

The  most  notorious  of  these  cases  are  known  as  the  Ribbon 
and  the  Fruit  cases,  which  occurred  within  a  few  years,  the 
shock  from  which  we  have  hardly  recovered  from  yet.  Mr.  Chair- 
man, your  associate,  Mr.  Robinson,  will  inform  you  of  the  nature 
of  these  cases.  Their  history  and  disastrous  results  to  the  public 
Treasury  (and  I  would  like  to  say  public  morals)  would  occupy 
too  much  of  your  time  to  consider  just  now.  But  these  com- 
binations are  continually  forming,  not  on  so  large  a  scale  as  in 
those  two  notable  cases,  but  just  as  disastrous  in  their  aggregated 
result  each  year. 

It  is  safe  to  say  of  the  vast  sums  paid  back  by  the  government 
for  overpaid  or  wrongfully-paid  duties,  not  more  than  one  half 
reach  the  parties  in  interest. 

The  demoralization  of  the  department  clerks  and  other  officials 
in  Washington,  in  arriving  at  conclusions  in  these  important  cases, 
is  well  understood  and  conceded.  When  hundreds  of  thousands, 
and  even  millions,  are  to  be  divided  as  the  result  of  such  deci- 
sions, it  is  not  surprising  that  officials,  high  and  low,  who  are  in 
any  way  connected  with  them  should  be  brought  under  suspicion. 
Occasionally  cases  arise  of  such  large  proportions  as  to  raise  them 
out  of  the  dull  local  routine  of  petty  larceny.  Such  a  case  is 
now  being  prepared,  and  when  the  time  comes  for  "  cracking"  the 
Treasury,  we  shall  be  shocked,  as  we  were  about  two  years  ago 
in  the  two  cases  named. 

In  1875  our  government  made  a  treaty  with  the  Hawaiian 
Islands  to  admit  their  sugar,  being  the  growth  of  those  islands, 
free  of  duty  ;  but  we  are  charging  all  other  governments  from 
one  and  a  half  to  four  cents  per  pound  on  sugar.  The  question 
now  arises,  Can  we  charge  governments  with  which  we  have  treaties 
which  contain  "  the  most  favored  nation  clause"  these  high  duties, 
while  we  admit  the  sugars  from  the  Sandwich  Islands  free  under 
the  treaty  just  mentioned  ? 

I  should  say  no.    At  all  events,  there  is  doubt  enough  on  the 


65 


subject  to  induce  all  importers  of  sugar  from  Spain,  Brazil, 
and  other  sugar-producing  countries  to  pay  their  duties  under 
protest  ;  and  when  the  proper  time  comes  for  making  up  a  case  in 
which  there  shall  be  "millions,"  then  we  shall  hear  of  another 
steal,  which  in  amount  will  far  exceed  the  Ribbon  and  Fruit  cases 
combined. 

If  you  go  so  far  in  your  inquiry  as  to  ascertain  the  influ- 
ence of  treaty  stipulations  upon  the  revenue  of  our  country,  you 
will  have  a  most  interesting  field  of  inquiry  in  the  workings  of  the 
French  tariff  as  it  affects  us  and  them.  You  w  ill  see  how  im- 
possible it  is  to  frame  tariffs  ignoring  these  treaty  stipulations. 
We  have  no  " favored  nation  clause"  in  our  treaty  with  France, 
and  that  nation  has  in  many  ways  attempted  to  discriminate  against 
us  in  her  tariff. 

Let  me  give  you  a  single  instance,  and  you  will  see  how  ineffect- 
ual it  is  ;  and  it  must  always  be  so  with  attempts  to  override  the 
laws  of  trade  and  commerce,  which  are  based  on  the  laws  of  God. 

The  French  tariff  attempts  to  discriminate  in  favor  of  Great 
Britain  and  against  the  United  States  in  the  article  of  leather. 
The  effect  is  that,  inasmuch  as  Great  Britain  admits  our  leather 
free,  we  supply  Great  Britain,  and  she  in  turn  supplies  France.  It 
only  makes  a  discrimination  against  us  of  one  or  two  commissions, 
which  are  paid  by  the  French  people  who  consume  leather.  How 
long  will  it  be  before  the  Sandwich  Islands  will  have  a  large  im- 
port  trade  of  sugar  which  we  will  have  to  distinguish  from  their 
home  growth  ?  At  the  present  moment,  although  the  treaty  has 
not  been  in  operation  two  years,  we  hear  that  importations  of 
crude  sugar  into  the  United  States  from  the  Sandwich  Islands  have 
been  challenged,  and  are  now  the  subject  of  litigation. 

I  beg  of  you,  gentlemen,  to  look  into  this  subject,  and  by  your 
timely  suggestions  to  nip  in  the  bud  these  deep-laid  schemes  to 
deplete  the  Treasury. 

But  what  shall  be  done  with  the  litigation  nowT  pending  ?  Most 
of  the  four  thousand  suits  now  pending  could  be  settled  by  trying 
about  ten  or  fifteen  of  them  ;  for  the  principles  involved  in  at 
least  two  thousand  of  the  suits  would  be  the  same  as  in  these  few 
cases. 

The  merchants,  so  far  as  they  have  any  interest,  would  most 
gladly  join  in  any  effort  to  facilitate  these  settlements.  But,  alas  ! 
the  lawyers  who  represent  by  far  the  larger  proportion  of  the 
claims  are  in  no  hurry  ;  they  seek  delay  until  other  and  corre- 
sponding cases  can  be  secured  to  their  office.  Being  thus  controlled, 
no  man  can  say  when  we  shall  come  to  the  end  of  this  litigation. 
5 


06 


My  suggestion  is  this  :  That  Congress  a1  its  next  session  shall 
be  asked  to  pass  an  act  taking  all  these  revenue  eases  from  the 
calendar  of  the  present  courts  and  refer  them  to  a  single  judge, 
or,  better  yet,  to  a  legal  commission,  whose  duty  it  shall  be  to  ad- 
judicate and  determine  them  in  the  most  summary  manner. 

The  next  point  to  which  I  call  your  attention  is  what  1 
shall  call  a  want  of  accommodation — absi znce  of  a  disposition  to 
adjust  <i ad  rmdxi  the  lu  st  of  obsctm  regulations  and  laws. 

This  want  of  accommodation  is  observable  both  in  the  law  and 
those  who  administer  it.  Let  me  illustrate  by  a  single  ease  under 
each  head. 

First,  the  case  of  my  friend  Barbour,  about  which  he  has  told 
you  something,  but  really  not  so  much  as  he  should;  for  although 
he  don't  look  like  it,  he  is  really  a  modest  man,  and  has  concealed 
from  you  more  than  half  of  his  grievances. 

Let  me  state  his  case  a  little  more  in  detail,  so  that  you  may  see 
just  where  the  blame  comes.  You  will  see,  I  think,  that  the  law  is 
all  right,  but  the  Custoni-House  department  has  been  wanting  in 
that  spirit  of  accommodation  and  adjustment  of  which  1  complain. 

In  1875  Ah-.  Barbour  was  invited  by  Act  of  Congress,  February 
8th, to  erect  a  factory  in  this  country  in  which  to  make  flax  thread. 
He  accepted  that  invitation,  and  at  once  commenced  to  erect,  at 
Paterson,  X.  J.,  a  large  factory  for  this  purpose,  which,  when  com- 
pleted, will  employ  from  000  to  800  hands. 

This  act  of  invitation  is  contained  in  the  following  section  (sec- 
tion 7,  Act  of  February  8th,  1875)  :  "  That  all  machinery  not  now 
manufactured  in  the  United  States,  adapted  exclusively  to  manu- 
facturers from  the  fibre  of  the  ramie,  jute,  or  flax,  may  be  ad- 
mitted into  the  United  States  free  of  duty  for  two  years  from  the 
1st  of  July,  1875." 

After  getting  his  building  ready,  Mr.  Barbour  purchased  his 
machinery  abroad,  where  they  knew  how  to  make  it,  and  where 
they  had  all  the  patterns.  The  machinery  arrived  within  the 
time  specified,  and  he  made  application  to  the  Secretary  of  the 
Treasury  to  admit  it  free,  under  the  Act  already  cited.  Mr.  Bar- 
bour was  referred  to  the  Collector  of  this  port  as  having  full 
power  in  the  premises.  Application  was  then  made  to  the  Col- 
lector, in  due  form,  in  the  following  letter  : 

"  New  York,  134  Church  street,  April  23,  1877. 

"General  C.  A.  Arthur,  Collector  of  the  Port  of  New  York. 

A  6  b j 

"Sir  :  In  the  matter  of  ten  cases  of  machinery  2/4 — three 


67 


cases,  B\  1  7 — seven  cases)  ex  steamer  Bothnia,  s;ii<l  machinery 
being  adapted  exclusively  to  the  manufacture  of  flax,  we  claim 
cntrv  free  of  duty  under  Act  of  8th  of  February,  L875,  sec.  7. 
The  packages  are  large  and  heavy,  and  we  request  you  will  have 
the  goodness  to  order  examination  at  our  mills  at  Paterson,  giving 
us  the  necessary  permit  for  their  removal.  We  have  written  on 
this  subject  to  the  Secretary  of  the  Treasury,  who,  in  a  letter  re- 
ceived to-day, — copy  of  which  we  enclose, — refers  us  to  you  as 
having  all  necessary  powers  in  the  premises. 

"  Yours  respectfully, 

"  Barbour  Brothers." 

The  Collector  replied  as  follows: 

"  Custom  House,  New  York  City,  ) 
Collector's  Office,  [- 
April  25,  1877.  ) 

"  Gextlemex  :  I  am  in  the  receipt  of  your  letter  of  the  23d  inst., 
and  in  reply  have  to  state  the  machinery  referred  to  maybe  ex- 
amined at  your  mills  at  Paterson  after  ent  ry  and  payment  of  duty, 
and  after  payment  of  travelling  expenses  of  the  examiner. 

"  Very  respectfully, 

"  C.  A.  Arthur  Collector:' 

It  will  not  do  for  the  Collector  to  fold  his  arms  and  say,  "There 
was  not  presented  to  me  sufficient  evidence  on  the  two  conditions 
of  the  law — namely,  first;  that  such  machinery  is  not  manufactured 
In  the  United  States  ;  a,ndsecond}  that  it  is  exclusively  adapted  to 
make  thread/' 

All  the  evidence  submitted  was  confirmative  on  these  two  points, 
and  consisted  of  the  affidavits  of  the  shippers  and  owners  of  the 
machinery. 

Now  if  the  Collector  had  any  doubt  on  either  of  these  points,  it 
was  plainly  his  duty  to  ascertain  by  his  own  or  other  experts  what 
the  facts  were.  But  how  could  he  do  this  while  the  machinery 
was  packed  in  boxes?  Hence  the  reasonableness  of  Mr.  Barbour's 
request  that  the  machinery  should  be  allowed  to  proceed  to  Pater- 
son (within  one  hour's  ride  of  New  York),  and  be  placed  in  position, 
where  a  more  intelligent  examination  could  be  made.  But  instead  of 
accepting  and  acting  on  this  suggestion,  the  Collector  says  sub- 
stantially, Pay  the  duty  first,  and  adjust  these  questions  after- 
ward— which,  being  put  into  a  practical  sentence,  means,  Pay  your 
duty  (probably  including  the  whole  machinery  here  and  to  come), 
from  $60,000  to  *so,000  in  gold,  and  sue  the  Collector  ;  and  after 
two  years  of  detention  and  the  payment  of  many  thousands  of 
dollars  in  legal  expenses,  the  money  may  be  refunded. 


08 


Tins  is  what  I  call  Custom-House  red-tape.  It  is  want  of  ac- 
commodation which,  in  this  instance,  amounts  to  an  outrage  upon 
the  rights  of  a  citizen. 

The  two  questions  involved  cannot  be  settled  any  further  than 
they  arc,  short  of  actually  setting  14)  the  machinery.  If  the  Col- 
lector wishes  to  protect  the  government  on  the  theory  that  Messrs. 
Barbour  Brothers  were  irresponsible  men,  he  could  mark  each 
piece  with  the  initials  of  an  inspector,  who  could  he  deputed  to  ac- 
company the  machinery  to  Paterson  and  there  see  the  machinery 
piece  by  piece  put  together,  or  In  could,  in  addition,  exact  a 
special  bond  for  double  the  amount  of  the  duties.  But  to  fold 
his  arms  and  say,  Pay  and  then  we  will  accommodate,  is  to  deny 
just  ice  to  M  r.  I  Jarbour. 

In  .Inly  ensuing,  the  Act-  authorizing  the  importation  of  this 
machinery  will  expire.  Then  will  come  complications  of  a  new 
character,  and  if  it  shall  result  in  the reshipment  of  this  machinery 
back  to  Europe,  and  the  entire  abandonment  of  the  manufacturing 
enterprise,  there  will  be  no  one  to  blame  hut  our  Custom-House 
officials. 

The  difficulties  which  Mr.  Barbour  has  had  with  the  appraisers' 
department  in  former  years,  and  the  signal  manner  in  which  by  his 
courage  and  persistency  he  defeated  their  machinations,  give  color 
to  the  opinion  that  there  exists  some  feeling  in  the  appraisers' de- 
partment against  his  firm.  But  the  same  perseverance  on  his  part 
will  ultimately  win  in  this  case  as  in  all  former  ones.  Hut  if  these 
practices  were  extended  to  importers  of  less  strength  and  will, 
they  would  be  obliged  to  succumb,  as  too  many  have  been  in  for- 
mer years. 

I  call  your  attention  now  to  a  case  where  the  want  of  accommo- 
dation is  in  the  law  and  the  decisions  of  the  courts. 

.Messrs.  Scheftel  Brothers  are  importers  of  .French,  German,  and 
Swiss  calf-skins.  They  had  pursued  their  business  all  last  year 
with  satisfactory  results,  liquidating  and  paying  their  duties  sat- 
isfactorily to  the  government.  Rut  when  at  the  close  of  the  year 
they  received  an  account-current  from  their  Paris  house,  they 
found  on  it  charges  for  expenses  paid  on  some  calf-skins  which 
were  bought  in  distant  parts  of  Germany  and  Switzerland,  incur- 
ring charges  for  transportation  before  they  reached  Paris,  where 
they  were  packed  and  finally  invoiced  for  the  United  States. 

The  invoices  which  had  been  liquidated  had  the  usual  inland 
charges  from  Paris  to  Havre,  which  misled  the  consignees.  Put, 
remembering  the  oath  which  they  had  taken,  on  entering  and  de- 
claring their  invoices,  that  if  at  any  future  time  they  should  mid 


69 


that  they  had  made  a  mistake  which  affected  the  amount  of  duties 
to  the  government,  they  would  make  known  such  variance, 
they  at  once  went  to  the  Collector,  like  honest  men,  and  gave  him 
this  information.  They  were  pointed  to  the  law  which  imposed 
one  hundred  per  cent  on  the  delinquent  importer  as  a  penalty, 
although,  as  in  this  case,  they  informed  against  themselves. 

This  question  has  not  yet  been  settled,  and  probably  will  not  be 
for  months  or  years.  The  whole  amount  involved  is  hut  a  few 
hundred  dollars,  and  but  for  the  near  approach  of  that  "better 
time"  when  merchants  dealing  with  the  government  may  expect 
the  same  rules  of  morality  and  law  extended  to  them  which 
applies  between  individuals,  these  gentlemen  would  have  sub- 
mitted  and  paid  according  to  "  law  and  regulation."  But  as  at 
present  advised  they  will  wait. 

From  the  experience  of  the  twro  hundred  merchants  who  have 
written  to  our  Committee,  giving  in  much  detail  their  cases,  in- 
volving just  the  principles  here  involved,  I  might  extend  this  dis- 
cussion indefinitely  ;  and  when  next  winter  we  shall  meet  the  com- 
mittees of  the  two  Houses  of  Congress,  we  shall  ask  of  these  mer- 
chants the  privilege  of  reading,  perhaps  of  printing,  their  experi- 
ence, which  I  venture  to  think  will  throw  new  light  upon  "  how 
not  to  collect  the  revenue." 

IN  PURCHASED  GOODS 

the  dutiable  value  is  determined  by  east  price  or  market  value, 
whichever  is  the  highest. 

IN   CONSIGNED  GOODS 

the  dutiable  value  is  deb rmiued  by  the  market  value  at  the  period 
of  exportation  in  theprincipal  markets  of  the  country  of  exportation, 
provided  such  market  value  is  not  less  than  the  invoice  price — i.e., 
tht  market  value  at  the  time  when  and  the  place  where  the  goods 
ivere  manufactun  d. 

Our  counsel  has  truly  stated  both  the  conclusion  of  our  Commit- 
tee and  the  general  sentiment  of  merchants  as  expressed  in  their 
letters  to  us,  when  he  said  that  "dutiable  v<due  should  be  uni- 
formly ascertained  by  market  value  at  the  last  port  of  exportation." 

But  I  venture  to  so  far  go  behind  this  expressed  opinion  as  to 
say  that,  but  for  the  fact  that  we  have  so  many  Custom  Houses  in 
the  interior,  most  merchants  would  prefer  "home  valuation." 
Indeed,  up  to  the  hour  when  this  subject  was  decided  in  com- 
mittee, I  judge  that  a  majority  was  in  favor  of  this  method  over 


70 


foreign  valuation,  and  they  were  confirmed  in  this  view  by  the 
further  consideration  that  penalties  and  forfeitures  on  the  English 
plan  could  under  this  system  he  adopted,  as  lias  already  been 
hinted  by  me.  Our  Committee,  however,  have  readied  the  con- 
clusion that  home  valuation,  as  a  basis  for  dutiable  value,  is  not 
practicable,  at  least  for  the  present  ;  but  I  personally  am  so  firmly 
convinced  that  home  valuation  is  the  simplest  way  out  of  most 
of  ourpresenl  troubles  that  1  take  the  responsibility  of  speaking 
a  few  words  iii  favor  of  that  system. 

Why  should  your  Commission  or  our  Committee  be  deterred 
from  recommending  so  proper  and  so  just  a  measure  by  any  ap- 
prehension of  political  consequences?  It  is  said  the  interior  will 
never  give  up  the  patronage  now  bestowed  through  our  revenue 
system.  They  w  ill  maintain  their  Custom  ETousesevenif  the  duties 
collected  fail  to  pay  the  cost  of  administration,  as  is  now  the  case 
in  many  of  them. 

Tins  assertion  and  assumption  seem  to  me  to  yield  up  the  whole 
question  of  revenue  reform  to  a  mere  political  expediency  which 
is  unworthy  the  reform  era  through  which  we  are  passing.  It 
seems  to  me  impossible  that  the  great  West,  with  its  power  con- 
ceded, will  insist  upon  exercising  it,  to  the  great  hindrance  of  this 
promised  economy. 

If  the  revenue  were  collected  in  the  six  or  eight  seaport  cities 
with  a  competent  corps  of  appraisers,  then  there  could  be  no  <pies- 
tion  about  the  superiority  of  this  method  of  home  valuation  in 
arriving  at  dutiable  value,  since,  besides  giving  a  more  certain 
and  uniform  result,  all  those  perplexing  questions  of  "  charges" 
could  be  avoided. 

I  desire  to  express  the  hope  that  your  Commission  will  give  this 
question  of  home  valuation  fair  consideration,  notwithstanding  the 
recommendation  of  our  Committee,  sustained  by  the  opinion  of  a 
majority  of  our  merchants. 

Specific  Duties  should,  wherever  possible,  take  the  Place  of 
Ad  Valorem. 

It  seems  to  me  no  answer  to  this  proposition  to  say  that  univer- 
sal substitution  is  impossible.  Even  if  this  is  true,  for  the  sake 
of  comparative  harmony,  this  substitution  should  take  place  wher- 
ever possible.  We  do  not  abandon  our  tariff  system  because  it  is 
one  eternal  incongruity,  resulting  in  absurdities  at  each  turn  of 
our  experience,  but  we  keep  on  patching  and  tinkering  the  system 
by  renewed  legislation  each  year  of  our  progress. 


71 


Every  body  realizes  the  difficulties  of  administering  revenue  laws 
which  exact  60  to  100  per  cent  duties.  It  has  been  proven  im- 
possible to  collect  over  10  per  cent  on  diamonds,  and  the  attempt 
to  collect  60  per  cent  on  silks  has  been  attended  with  the  greatest 
demoralization,  and  this  extreme  duty  must  sooner  or  later  give 
way  to  more  moderate  exactions.  But  still  we  keep  on  attempt- 
ing the  impossible,  and  wonder  why  men  do  not  become  accus- 
tomed to  it.  This  strain  upon  the  consciences  of  men  will  cease, 
in  a  measure,  when  specific  duties  shall  take  the  place  of  ad 
valorem. 

For  a  most  intelligent  discussion  of  this  question  of  the  substi- 
tution of  specific  for  ad  valorem  duties  I  beg  to  refer  to  the 
report  of  the  Statistical  Bureau,  by  Edward  Young,  for  1872. 
This  report  closes  with  a  most  elaborate  and,  as  I  think,  successful 
attempt  to  reduce  all  ad  valorem  to  specific  duties,  giving  the 
exact  equivalent  the  one  for  the  other. 

Drawbacks  and  Debentures. 

One  of  the  most  fruitful  sources  of  possible  fraud  may  be  found 
in  a  system  of  drawbacks  which  has  been  instituted  under  section 
3019  of  the  Revised  Statutes.    That  section  is  as  follows  : 

"There  shall  be  allowed  on  all  articles  wholly  manufactured  of 
materials  imported,  on  which  duties  have  been  paid  when  ex- 
ported, a  drawback  equal  in  amount  to  the  duty  paid  on  such 
materials,  and  no  more,  to  be  ascertained  under  such  regulat  ions 
as  shall  be  prescribed  by  the  Secretary  of  the  Treasury.  Ten  per 
centum  on  the  amount  of  all  drawbacks  so  allowed  shall,  however, 
be  retained  for  the  use  of  the  United  States  by  the  collectors  pay- 
ing such  drawbacks  respectively." 

The  Treasury  Regulations,  article  819,  provide  that  entry  for 
the  above  drawrback  shall  be  made  at  least  six  hours  before  lading 
on  vessel  ;  also  that  proprietor  and  foreman  of  the  manufactory  in 
which  the  articles  were  manufactured  must  make  oath,  the  same 
to  be  attached  to  the  entry,  that  the  goods  were  manufactured 
wholly  of  imported  materials  on  which  duties  had  been  paid. 

The  attempt  to  encourage  manufactures  in  the  United  States 
has  taken  upon  itself  many  forms.  But  this  last  one  is  the  most 
comprehensive  and  doubtful  of  any  yet  devised.  If  it  was  possi- 
ble always  to  determine,  on  the  examination  of  manufactured 
goods,  whether  the  raw  material  was  wholly  composed  of  foreign 
growth  or  production,  there  might  be  more  safety  in  the  system 
than  now  seems  possible. 


72 


When  tl^e  invitations  of  this  statute  shall  become  generally 
known,  and  its  provisions  availed  of,  the  amount  of  drawbacks 
which  will  be  called  for  will  so  deplete  our  Treasury  thai,  in  my 
opinion,  its  repeal  or  extensive  modification  will  follow. 

///  lit  n  <>f  bonds  and  oat/ts,  hold  the  goods  until  the  duly  is 
/'</i>l.    This  is  tlie  grand  panacea  for  half  the  ills  we  sutler. 

When,  fifty  years  ago,  it  was  the  custom  of  the  government  to 
accept  the  time  notes  and  bonds  of  merchants  in  lieu  of  gold 
duties,  :is  ;tt  present,  there  was  sonic  excuse  for  the  distrust  exer- 
cised. At  that  early  day  the  notes  held  by  the  government  were 
a  first  lieu  upon  the  merchant's  property  ;  hut  now  all  that  prior- 
ity is  rendered  unnecessary  by  the  requirement  of  the  payment  of 
cash  duties  befon  any  <>t' th>  :/<»><ls  an  <l<ii r,  <i  and  there  would 
seem  not  to  he  the  least  excuse  for  the  bonds  now  so  persistently 
demanded.  The  government  says,  k*  Give  me  the  gold  dutj  and  then 
you  can  get  your  goods,  and  not  before  and  so  long  as  the  mer- 
chandise is  good  for  the  duties,  there  would  seem  not  the  Least 
necessity  for.  bonds  ;  and  while  the  merchandise  is  in  the  actual 
possession  of  the  government,  and  they  have  competent  appraisers 
to  determine  it>  classification  and  value,  what  need  is  there  t<<  ask 
the  consignee  to  swear  about  a  matter  that  lie  cannot  know  as 
much  about  as  the  parties  in  actual  possession  « >f  the  goods'/  We 
may  be  told  that  these  bonds  are  required  to  secure  the  balance 
due  on  final  liquidation.  But  forty  years'  experience  shows  that 
less  than  one  per  cent  will  pay  all  such  short  payments. 

77/f  Government  must  be  heldresponsibi<  /'<>/■  tl,,  Arts  <>f  Its  own 

Agents. 

By  far  the  larger  number  of  errors  and  omissions  in  the  invoices 
of  the  importers  arise  from  omissions  in  charges,  such  as  com- 
missions."  inland  freight,"  "boxes,"  "  cartons,"  etc. 

These  omissions  should  be  detected  by  the  examiners  and  other 
officials  of  the  government,  and  exposed  at  the  time  of  entry,  so 
that  if  the  merchant  has  omitted  them  from  ignorance,  his  remiss- 
ness may  be  corrected  ;  and  if  from  design,  then  he  should  be 
made  to  feel  that  his  unfaithfulness  is  detected. 

Let  me  particularize,  so  that  we  may  see  just  the  extent  to  which 
the  Custom-House  official  should  be  held  responsible  for  these 
omissions  or  errors,  which,  when  allowed  to  pass,  are  so  fatal  to 
the  integrity  of  the  invoice. 

Let  me  suppose  that  the  invoice  is  one  of  silks  from  Lyons,  in 
France.  The  clerk  who  examines  this  invoice  knows  that  by  law  an 
arbitrary  commission  must  be  added  to  all  invoices,  whether  such 
commission  is  actually  paid  or  not.    He  knows  that,  from  the  nature 


IS 


of  the  goods,  silks  must  be  packed  in  boxes  which  cost  money. 
He  knows  that  to- bring  boxes  from  Lyons  to  Havre,  being  the 
last  port  of  exportation,  "  inland  carriage"  must  be  paid.  He 
knows  that  this  transaction  is  made  in  France,  and  therefore  the 
invoice  must  be  made  out  in  the  currency  of  that  country — namely, 
in  francs.  He  knows  that  a  consular  certificate  must  be  attached. 
Now  if  any  one  of  these  conditions  are  omitted,  it  is  his  duty 
to  notice  the  omission,  and  yet  he  seldom  does  this.  If  he  does 
it  at  all,  it  is  to  give  notice  to  some  vigilant  detective,  who  is  to 
earn  the  commendation  and  pay  of  the  Treasury  Department  for 
exposing  the  "  rascally  importer  in  his  attempts  to  cheat  the  gov- 
ernment." 

If  the  appraisers'  department  allows  goods  to  pass  under  a 
wrong  classification,  that  department  and  not  the  importer  should 
be  held  responsible.  If,  after  a  full  exposure  of  the  goods  by  sam- 
ples, undervaluations  are  alleged  even  in  this  case,  the  govern- 
ment should  be  estopped  from  making  reclaim  after  final  liqui- 
dation. 

It  is  the  duty  of  the  government  to  have  competent  expert  ac- 
countants and  expert  appraisers.  But  if  they  should  not  have 
such,  by  defective  methods  of  appointment,  they  have  no  right  to 
hold  the  merchant  for  their  remissness.  Much  complaint  is  made 
by  importers  that  incompetent  appraisers,  to  make  good  their 
own  want  of  knowledge,  exhibit  invoices  to  their  competitors  in 
trade.  This  is  a  wrong  which  the  government  has  no  right  to 
commit.  If  their  appraisers  of  themselves  have  not  the  requisite 
knowledge,  then  the  government  should  suffer. 

What  would  a  merchant  in  one  of  our  Western  cities  think  of  a 
process  which  exposed  not  only  the  price  but  the  description  of 
goods  which  they  brought  to  their  customers,  and  told  their  com- 
petitors, besides,  from  whom  they  made  their  purchases  ?  And  yet, 
under  our  incompetent  system  of  appraisement,  these  exposures  are 
constantly  liable  to  be  made  of  the  business  transactions  of  our 
importers. 

Whatever  weakness  or  imperfection  inheres  in  our  system  of 
revenue  service  should  not,  as  now,  be  charged  solely  to  the  ac- 
count of  our  merchants,  but  should  be  divided  at  least  with  those 
who  control  the  administration  of  the  service.  Until  such  re- 
sponsibility and  comity  can  be  established  there  must  be  the 
same  friction  and  estrangement  which  at  present  exist.  The 
efforts  of  your  Commission,  if  properly  directed,  must  tend  to 
bring  about  a  better  state  of  feeling  between  the  merchant  and 
his  government. 


